What is monopolistic?
Monopolistic describe that just one firm
that exist in the industry. Monopolistic company is the price maker for the
product or services. Second, there is a high barrier to entry the industry so
that the others cannot enter the industry so that can get maximize profit. Monopolistic
is the only firm that operating in the industry, so there is just one seller of the good that produces all the output.
Therefore, the whole market is being served by a single company, and for
practical purposes, the company is the same as the industry. Lastly monopolistic
company has the power of price of discrimination. A monopolist company can
change the price and quality of the product. He sells more quantities charging
less price for the product in a very elastic market and sells less quantities
charging high price in a less elastic marker.
The
example of the monopolistic company is ASTRO. They is the only firm that
providing varieties of TV channels of different counties. Although they
increase the price of the channel they also continue on going because they are
monopolistic company.
·
How does a monopolistic company function?
1.
Only one firm that exist in the industry
2.
So that are no other competitor and that make
maximize profit
·
Why monopoly can increase their price but no
decrease in demand?
1.
This is because consumers have no other choice
so that they can just continue to supporting the monopolistic firm.
·
How does it affect the consumers and economy?
2.
Consumers have no other choice although the
product or services of the firm is expensive and the quality is bad.
3.
If there are too many of monopolistic, those
monopolistic company will try to get the maximize profit and inflation of
economic will occurs.
4.
Due to the monopolistic company trying to get
the maximize the profit, so they will increase the product or services, so the
total output of the company will increase. The gross domestic product of the
country will increase.
·
Spending Power
1.
Spending power of consumers will increase due to
consumer willing to pay more than the market price
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