Assignment Question:
1a) ‘A firm would prefer to b a monopoly, rather than be involved in a perfectly competitive market.’ Discuss.
1b) In May 2009 Intel was fined a record amount by the EU for predatory pricing. Assess how easy is it to conclude that Intel undertook predatory pricing?
Contents
I) 1a) ‘A firm would prefer to b a monopoly, rather than be involved in a perfectly competitive market.’Discuss-------------------------------P/1-P/5
1) Market Environment---------------------------------------P/1-P/2 2) Profit Maximization----------------------------------------P/2-P/5 3) Benefits on Research & Development -------------------P/5
II) 1b) In May 2009 Intel was fined a record amount by the EU for predatory pricing. Assess how easy is it to conclude that Intel undertook predatory pricing?----------------------------------------------------------------P/6-P/8
III) Reference & Bibliography---------------------------------------------P/9
Business Economics Assignment (UBNo.: 09034262) P/8
1a) ‘A firm would prefer to be a monopoly, rather than be involved in a perfectly competitive market.’ Discuss.
A monopolist has sufficient control over the services or products its provides in determine significant terms in order to maximize profits. This is directly contrast a firm operating within perfectly competitive market. To a large extent, a firm would prefer to be a monopoly.
If a firm can be a monopoly, they can have following three advantages over doing business in perfectly competitive market.
1) Market Environment
The best way to compare two extremes market structures - monopoly and perfect competition by following characteristics: (a) Number of firms in market, (b) Level of product substitution, and (c) Barriers of market entry.
(a) Number of firms in market Perfect competition is an industry composed of a large number of sellers and buyers, means the