In seven pages this paper examines free competition and monopoly models in a consideration of how a successful corporate transition from monopoly to a freely competitive market can be achieved. Five sources are listed in the bibliography.
Name of Research Paper File: TS14_TEmonopy.rtf
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markets, bringing in competition and adjusting the market structure on one of pure competition. In order to consider these changes we first need to consider what it is that is
meant by a monopoly, what it means to both the business and the consumers. Then we will consider the model that is the ultimate goal, free competition. Once these are
understood we may look at how the transition may be made from one extreme of the market structure options to the other, and what the impact of these changes will
be, and what policies may be required to ensure that the transition takes place and is successful. The opposite extreme of a
pure competition is a monopoly (Thompson, 1998). In a pure monopoly, there is only one company in the sector, there is no competition and therefore the service or product is
unique and differentiation standardisation is not an issue as there is only the one product or service available (Thompson, 1998). This
single company control means that market forces will mean very weak as the monopoly is often in a industry where there is elasticity of a company is below 1 and
as such is an essential service, therefore there is a large amount of power with the supplier and as such there are many problems with a monopoly. If a competitor
which to enter that market they will not be able to as their entrance will be completely blocked (Thompson, 1998). There will also be a high degree of asymmetry of
information in this market structure. This type of market is becoming less popular due to the problematic nature of the market where