Wonk Potato Chips

Principles of Microeconomics I January 29, 2012 last(a) Project The potato chip pains in the northwest was running in competitive equilibrium in 2007. In 2008 ii lawyers quietly bought all of the firms and created a noncompetitive guild called Wonks. The ii lawyers then hired consulting firm to resolve the different long term equilibrium. This paper will phone the benefits that a monopoly has over a monopolistic competitive turn tail along. A monopoly is a business that produces a product that on that point be no close replacements and in which in that respect ar strong obstacles for in the altogether firms to assent the market [ (Case, Fair, & Oster, 2009) ]. white potato chips be a unique snack while there argon replacements none are really the same. As for obstacles to novel firms attempting to enter the market this would require a large roof investiture that would be very risky. Wonks could increase production and subdue prices fashion ing it hard in not impossible for the new company to let a re hitch cope with to the market rate. When the two partners bought up all of the competing businesses they created a monopoly. By creating a monopoly the two partners are now in reckon of the pains. They now run through complete affirm of return and the price that is set for their product.

The whole limits they face are the price that the market is willing or able to pay and their speak to of production. When a company nookie operate as a monopoly there is no exit between the company and the industry [ (Case, Fair, & Oster, 2009) ]. When a compa ny gains control of an entire industry all o! ption are up to the companys discretion. The monopoly has complete control of supply, therefore it can control demand by distributing less(prenominal) of their product, this will in turn raise the price consumers are willing to pay for the product. This hurts consumers by decreasing the utility gained by each dollar spent. Final Project The government has policies in place to protect consumers from...If you want to get a replete(p) essay, order it on our website: OrderCustomPaper.com

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