MONOPOLISTIC PRACTICES

The following practices may be said to characterize monopolies.

Exclusive dealing to supply and collective boycott

Producers agree to supply only to recognized dealers, normally only one dealer in each area, on condition that the dealer does not stock the products of any producer outside the group (or trade association).  Should the dealer break the agreement, all members of the group agree to withhold supplies from the offender.  This practice has proved a very effective restriction on competition for it ensures that any new firms would find it extremely difficult to secure market outlets for their products.

Barriers

The creation of barriers to ensure that there is no competition against them.  E.g price undercutting, individual ensure that actual text printed collective boycott and exclusive holding of patent rights.

Resale Price Maintenance (PRM)

A monopolistic firm may dictate to wholesalers and retailers the price at which its products would be sold.  This is another way of ensuring that other firms are not attracted into the industry, if such firms can sell their products at more competitive prices.

Posted Date: 11/28/2012 5:19:33 AM | Location : United States

Ask an Expert

Related Discussions:- Monopolistic practices, Assignment Help, Ask Question on Monopolistic practices, Get Answer, Expert's Help, Monopolistic practices Discussions

Write discussion on Monopolistic practices
Your posts are moderated

Write your message here..

Related Questions

Stable and unstable equilibrium, Stable and Unstable Equilibrium An eq... Stable and Unstable Equilibrium An equilibrium is said to be stable equilibrium when economic forces tend to push the market towards it.  In other words, any divergence from t

Normal and supernormal profits, NORMAL AND SUPERNORMAL PROFITS Normal ... NORMAL AND SUPERNORMAL PROFITS Normal profit refers to the payment necessary to keep an entrepreneur in a particular line of production. In economics, it is generally belie

What is demand theory, What is Demand theory: Demand theory relates to ... What is Demand theory: Demand theory relates to the study of consumer behaviour. It addresses questions like what incites a consumer to buy a particular product, why do consume

Explain the efficiency wage model, Q. Explain the Efficiency wage model? ... Q. Explain the Efficiency wage model? Efficiency wage models such as Shapiro and Stiglitz (1984) suggest wage rents as an addition to monitoring, because this gives employees a

Uses of national income figures, USES OF NATIONAL INCOME FIGURES We... USES OF NATIONAL INCOME FIGURES We need national income statistics to measure the size of the "National cake' of goods and services available for competing uses o

Amount of labor , One lumber producer may locate a plant in the same area.... One lumber producer may locate a plant in the same area.  If it does, there will be more competition for labor and the labor supply function facing Northern will shift to

Attributes in designing a good tax system, Question: a. What are the b... Question: a. What are the basic attributes in designing a good tax system? b. Explain briefly how tax systems affect economic efficiency. c. The trade unionists advocat

What are the concept of managerial economics, Concept of Managerial Economi... Concept of Managerial Economics The discipline of managerial economics deals with characteristics of economics and tools of analysis that are used by business enterprises for dec

Neo-classical view, The neo-classical view The neo-classical view is t... The neo-classical view The neo-classical view is that market forces are the best directors of the economy.  Positive attempts by the government it is argued inevitably make th

Determine that the laws of economics still work today, (i) Do the laws of e... (i) Do the laws of economics still work today? (use the case discussed in class to answer this question or any other examples) (ii) Provide examples of three factors that can sh