Monopolistic practices, Managerial Economics

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 5:19:37 AM | Location : United States







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
Related Questions
Factor combination in the long run In the long run it is possible to vary all factors of production. The firm is therefore restricted in its activities by the law of diminish

It can be geometrically proved that two elasticity are equal, which is., QB=RD Let's first consider ΔAOB. If we draw a horizontal line from point Q to intersect the vertical axis a

Theory of consumer behaviour The role of customers in an economy is of significant importance because consumers spend most of their incomes on services and goods produced by fi

Question 1: a. What are the different channels of monetary policy? b. Discuss why the channels of monetary policy are likely to change in the wake of financial liberaliz

Tomato Farm is selling tomatoes in a purely competitive market. Its output is 5000 bushels, which sell for $15 a bushel. At this level of output, the marginal cost is $15 bushel an

The Firm The unit that uses factors of production to produce commodities then it sells either to other firms, to household, or to central authorities. The firm is thus the uni

Ask questiHow does economic theory contribute to managerial decisions? on #Minimum 100 words accepted#

APPLICATION OF MANAGERIAL ECONOMICS Tools of managerial economics can be used to accomplish virtually all the goals of a business organisation in an efficient manner. Typical m

Assumptions of Monopolistic Competition Monopolistic competition as the name implies, combines features from both perfect competition and monopoly.  It has the following featu

Drafting of Price Policy: Demand forecasts assist the management to prepare a few appropriate pricing systems, so that level of price doesn't fall and rise to a great extent at th