Monopoly Duopoly And Oligopoly In Australia-Myassignmenthelp.Com

Question: Discuss About The Monopoly Duopoly And Oligopoly In Australia? Answer: Introduction Monopolies, duopolies and oligopolies are types of markets within an economy. This market influence the product availability in the markets and the prices for products. Australian market has all the three market systems dealing in various products and services. There is a responsibility of creating an environment for the survival of the markets without exploiting customers.(Flynn, 2011) Monopolies refers to a market where only one seller provides goods and services to the market. The reason for this is due to lack of competitors in the market. Moreover, a monopoly can result due to the provision of unique products to the market. Monopolies creation is a way used by competitors where one firm pushes competitors are out of the market. Monopoly information is important to Australian economy planners. The information helps economy planners understand how the monopolies influence demand and supply patterns of the market. Therefore, economic planners use this information to come up with policies that ensure demand and supply is maintenance at equilibrium.(MIller, 2017) Duopoly refers to a market system controlled by two suppliers. This sellers deal in the same product or slightly different product, which fulfil the same purpose. For example in Australia, the Rudds government enquiry established a duopoly between Coles and Woolworths supermarkets. Information on duopolies is important to investors wanting to enter the market. Investors need duopoly information to understand how to penetrate the market and tap customers. They is also the need to know how to compete with the duopolies to prevent from pushing out of the market.(Mankiw, 2017) Oligopoly refers to a market where just a handful of suppliers control the market. Oil companies form the largest oligopolies in Australia. Oligopolies exploit their customers because they run the market demand and supply patterns. Economists are concerned because of the unfairness of oligopolies in the market. Economists need to control the inefficiency brought about by oligopolies in the market.(McConnell, 2014) Economic concepts and theories Monopolies operate alone in the market without competition. The reason for existence of monopolies is when there is a ban of entry into the market. When other firms are not able to enter the market, then a company runs the market alone. The effect of monopolies to the market is that they can charge high prices to customers who still pay due to lack of alternatives. There is also the problem of limited supply of products when the demand exceed the monopoly ability to supply. The telecommunication market in Australia presents a good example of a monopoly. They set very high prices, which the customers still pay for due to lack of cheaper alternatives. The consumers concern is the lack of competition in these markets, which could drive the process down. Duopolies are two firms competing against each other. Duopolies affect the market largely especially in terms of prices. The oligopolies could collude to increase the same high prices to customers who lack alternatives. Collusion creates an unfair market, which exploits consumers with high prices. The duopolies also result to a reduction in prices where duopolies compete against each other through price reduction. The price war results to a reduction of prices as the companies strive to charge less for their products. Australian duopolies are such as Woolworths and Coles supermarkets who control the grocery market.(O'Sullivan, 2005) Oligopolies refers to a handful suppliers controlling the supply of products. They use this power in controlling the prices of products such as charging high prices to customers. They charge high prices to the customers, which result to making super profits. The oligopolies too can influence a price reduction when they engage in price wars which results to companies wanting to charge less than the rest. The petroleum industry in Australia controls the market prices and the demand and supply patterns of petroleum products.(Suranovic, 2010) Recommendations to key players Monopoly policyholders come up with policies that tame the harmful effects of monopolies on the market. The government has a responsibility to ensure that the monopolies do not exploit their consumers by charging high prices. A policy such as setting a maximum selling price for the products is important in taming monopolies. The government should come up with an affordable price for customers to avoid exploitation. The price control ensures that the monopolies do not sell at a higher price than that. This is important in ensuring that monopolies do not set exaggerated product prices to exploit customers.(Sowell, 2014) Duopolies also require policies to prevent them from exploiting customers. The government uses various strategies to prevent duopolies from exploiting customers. Price controls protect the customers from exploitation based on high prices charged on products. The government use subsidies to reduce prices of products. They are given to the duopolies to assist reduce their production costs. This translates to the customers charging less for their products in the market. The government using this means is able to control the high costs charged by duopolies. Oligopolies also need checking to prevent them from exploiting consumers. Oligopolies are similar to monopolies and thus the economic planners may apply similar policies. Economic planners need to control the prices of products and the supply of products. Policies such as price controls are important in maintaining prices at a level that the customers can afford. The government set policies controlling the minimum amount of supply to the market. This policy ensures that the oligopolies do not create product shortages in the market to raise product prices. This policy maintains customer demand at equilibrium and the prices too stay at equilibrium.(Paul Krugman, 2015) Conclusion The analysis is important in concluding that the market systems play a major role in controlling the prices of products. The markets do this by influencing the demand and supply patterns in the market. Government policies therefore help control the exploitation of customers under these markets. Economic markets play a major role in the running of the economy by providing products to the customers. Monopolies, duopolies and oligopolies are almost similar in the way they control the market. The similarity comes in that each of them are able control the amount of products brought to the market and their prices. References Flynn, S. M., 2011. Economics For Dummies. 2nd ed. s.l.:For Dummies. Mankiw, G., 2017. Principles of Economics. 8th ed. s.l.:South Western College Pub. McConnell, C. R., 2014. Economics: Principles,Problems Policies. s.l.:McGraw-HIll Education. MIller, R. L., 2017. Economics Today. 19 ed. s.l.:Pearson. O'Sullivan, A., 2005. Economics:Principles in Action. s.l.:Prentice Hall. Paul , R. W., 2015. Economics. 4 ed. s.l.:Worth Publishers. Sowell, T., 2014. Basic Economics. 5 ed. s.l.:Basic Books. Suranovic, S., 2010. International Trade : Theory and Policy. Washington: Saylor Foundation.