Parking Economics Essay Example | Topics and Well Written Essays - 500 words

put Economics - Essay ExampleLegal barriers restrict competition through methods such as patents or copyrights, public franchise and government licenses (Duffy 119).Price discrimination and a maven price markets are the both main price strategies utilized in monopolies. For most monopolies, low prices facilitate larger output therefore, single price strategy is efficient in determining output and price. Single price monopoly involves selling its completed output unit at similar prices to all customers. This strategy builds on the flux in lead for goods. In an elastic environment, single price monopoly works best by increasing the production of a unit and reducing the selling price thereby, increasing marginal revenue that translates to profits. However, in a dictated demand market setting, fall of price in the output translates to decrease in total revenue. In such markets, monopolies reduce the number of units produced and increase the price of each unit. This will decrease th e total damage but increase the income profits (Duffy 120).In a perfect competition market, equilibrium occurs when the demand is relate to supply in regard to unit quantity and price. On the other hand, equilibrium in a single price monopoly markets occurs when the marginal revenue and the marginal live are equal. Monopoly equilibrium relies on a higher price smaller output strategy. Perfect market competition is more efficient than a monopoly market because the marginal social benefits and the marginal social costs are equal. This equilibrium describes the maximization of consumer scanty and producer surplus hence production of efficient output. Firms that run a monopoly are not subject to get maximum outputs from the available inputs. In summary, marginal social benefit exceeds marginal social cost leading to dead weight loss. However, this discrepancy can be averted through rent seeking which is the functioning of redirecting the surplus from a