Company Advantage

Company Advantage

Evidently, so that this strategy is made possible, it must be a type of merchandise the service that does not have next substitutes. A differentiated category of the monopoly is the state or institucional monopoly, protected for the legislation, normally in strategical sectors or of infrastructure. Electric cars addresses the importance of the matter here. Monopolista or imperfect competition (monopolista competition) Even so presents, as in the perfect competition, a market structure where a high number of companies exists, the imperfect competition is characterized for the fact of whom the companies produce differentiated products, substitute even so next. For example, different marks of sabonete, cooling, soap in dust, etc. Are treated, thus, of a structure next to the reality that the perfect competition. differentiation of products can be given for physical characteristics (chemical composition, power etc.), for the packing, or the project of promotion of sales (propaganda, attendance, toasts, etc.); In this structure, each company has certain power on the setting of prices, however the existence of next substitutes allows the alternative consumers to run away from increases of prices. In the same way that in the perfect competition, the assumption prevails of that barriers for the entrance of new firms in the market do not exist. Example of Monopoly & ndash; exploration of the oil for the Petrobra’s company, exactly knowing that legislation exists that allows other companies to explore the oil in Brazilian territory is very difficult that this company gets success, in function of the wide superiority of Petrobra’s and of its domain of the market. Advantages and disadvantages of the monopoly Advantage: The production on a large scale reduces costs, that if repassed the consumers; Disadvantages: Possibility of inefficiency of the monopolista firm and until lack of stimulaton for improvement of the productive methods; Limitation imposed to the consumers how much to the chances of purchase and choice; Abusive prices eventually settled to the consumer whom, in consequence? High profits to the monopolista.

Comments are closed.