Economics for business Essay Example | Topics and Well Written Essays - 2000 words - 1

Economics for business - Essay ExampleIn order to find the marginal cost we leave calculate the first derivative of total cost functionMonopoly is a commercialise structure where there is a single producer or vendor of the product in the market with no substitutes available. This means that the ultimate power lies with the producer or seller and not with the consumer. In other market structures, the way to choose a product is in the hands of the consumer but in a monopolistic market there are no substitutes available and the consumer has to ingest what is being offered to them.Monopoly is considered inefficient due to the fact that the market doesnt have any substitute of the product giving the producer or seller an indorsement to set prices according to their need. They usually discriminate regarding the prices and charge higher than the marginal cost of production in the market. Such market doesnt focus on the consumers as they are aware that no matter what ultimately the con sumers will choose their product even if the quality of the product is below the standards. In such market structure, the barriers to entry are high giving no or little entry positions to other businesses. As a result of the barriers there is no competition or rivalry in such market.This market is considered inefficient than the other market structures because this market produces slight output as compared to others. With no competition, lessening in the output level leads to high prices. It also creates inequality because it converts the consumer surplus into producer surplus. This inequality between the price charged and the marginal cost makes this market inefficient. This means that there is price discrimination in such market and some consumers have to pay higher prices.In monopoly the output level is less and creates unemployment of the resources. The resources are not properly and efficiently utilized as compared to other market structures. In such market the price is grea ter than the marginal