Monopoly Oligopoly and Duopoly in Australia †MyAssignmenthelp.com

Question: Discuss about the Monopoly Oligopoly and Duopoly in Australia. Answer: Introduction Economicsis the study of financial aspects of a country as a whole or the study of the resources that an individual have in monetary terms.Economics can be divided into two parts i.e.Micro-economics and Macro-economics. Micro-economics is study of economic at a small or an individual level(Webster, 2013), for example: when a study of a single person income is considered or the study of economic resources that a particular single firm has is known asMicro-economics. While the study of a nations income as a whole is known as Macro-economics(Birach, 2011). Here in this assignment we will discuss the topic of Monopoly, Duopoly and Oligopoly in Australia. Monopoly is an industry where there is only a single firm with lots of buyer. Duopoly is a situation where a small number of companies mostly two, dominates the entire market. Oligopoly is again a situation where there is the number of buyers is high as compare to the number of sellers. Australia has a diversified market, it has a large number of firms, but every country does have monopolistic, duopolistic and oligopolistic firms. In this assignment we are going to discuss these topics in detail. Critical Analysis Here we will discuss the topic of Monopoly, Oligopoly Duopoly in Australia, in detail. Monopoly is a situation where there is only a single seller of a product with a large base of buyers (Monopoly firm is mostly owned by a government). An example of a monopoly firm/industry in Australia is: Australian post, Trains Water services. This means that these firms are, only allowed to undertake their business services with no other competitors in their relative field of operations. Now if talk about Oligopoly firm of Australia then it would be, the Coles and the Woolworth. Both these Australian firms have a dominant power in the market they occupy around 75% of the Australian supermarket chains(Shinu, 2005). An example of Duopoly will be the sonic health and the primary health care, they together holds a market share around 77% in Medicare industry of Australia. A nation or a country is dependent on its market, if any country has a market that is restricted to few sellers then it wont be able to earn a good amount and their earnings may sound profitable but they will always be limited(Adamgale, 2016). Below is the Graph for three of the above mentioned market forms: Above graph shows the Profit maximization under monopoly firm. In the above graph a monopoly firm will produce maximum profit where MR=MC.(Jack, 2015) The above model was introduced by (Cournet, 2000) in duopoly model he emphasized that each firms maximizes profit, market demand is liner, each firm decides its price by determining others firms prices Above graph shows the oligopoly market, this graph is also known kinked demand curve, this graph makes certain assumptions that firms always profit maximizes, if one firm increase the price others will not follow but if one firm will decrease its products prices then others will follow in order to not to lose the market share(George, 2011) Recommendations Now if we talk about a monopoly firm, it is that earning part of a government or privately owned institutions on which substantial part of their earning relies. In Australia the Australian post, power water services are owned by the Australian government. Similarly in India, Railways, In New Zealand, and Telecommunications and in U.S, the drug companies are owned by monopoly firms. Does monopoly firms are capable of providing any good to the community then the answer would be a big NO. A monopoly firm being a single seller in their relevant field of business uses this opportunity in earning good profits from the customers, without even knowing if their customers are happy with the services provided to them. In my opinion Monopoly firms are a big setback for any nation, as they do not let any other firm to compete in the market. If any other firm will compete the monopoly firm will have to look after their customers demands and then they will not be able to practice price discriminat ion, in addition to this customers will not have to pay sky-high prices for the products and services. Coming to Duopoly, in this type of market there are only two sellers or the producer of a product or a service. They produce products of identical nature and on a same cost(Bellarus, 2010). However they are not known to the strategies of their competitor, so they produce the best of what they can at lower prices in order to give a tough competition to their rival. This type of market is good, however if this number of only 2 sellers is increased to at-least 7-8 sellers then the scenario will be much different. The competition then will increase plus the government of the particular country will enjoy good income from such companies as a source of tax. Under Oligopoly again the number of sellers is small, and the buyers are really on large. Here also we would recommend increasing the number of sellers as it will not only increase the competition but it will also boost the economy of a country. When there will be a good number of competitors, the feeling of competition and providing best to the customer for assuring a long run in the market will strike again and again in the mind of the seller. Hence it is really important for a nation to not to restrict its market to a single or to a limited number of firms as it can setback its economy. Conclusion By observing all facts and important information regarding the topic, a detailed and a brief conclusion is provided here. Monopoly, Oligopoly, Duopoly is that form of market that restricts the entry of the new sellers and limits the market of a country to a small number of sellers i.e. one or two or three only. This limitation over the market not only affects the customers but also the economy of a country in their long run survivals. In Australia Water, Post and train services falls under monopoly, whereas Coles Woolworth falls under oligopoly and Sonic health care primary health care falls under duopoly form of market. This means that from certain sectors or areas Australian economy will only get a certain amount of income as taxes, because the number of sellers in these areas is limited. In order to maximize the wealth in the economy, the Australian government must put an end on such forms of markets that restricts new entrants to perform business. If this happens, Australian econ omy will enjoy a boom as new firms will enter new markets, job opportunities will increase and the customers will get desired products at nominal prices. Bibliography Adamgale, 2016. Monopoly Oligopoly. P.hd. Vatican city: U.Z Publishers U.Z institute of economic studies. Bellarus, 2010. Different types of market. 1st ed. belgorold: Miracle Publishers. Birach, J., 2011. Macro-Economics for studying nations wealth. New Time New Day, 1(1), p.5. Cournet, 2000. Duopoly. 2nd ed. France: Cournet. George, G., 2011. Oligopoly firm. In Karton, ed. Internation standards for economics around the world. 1st ed. beaumount: U.S publishers. pp.125-70. Jack, B., 2015. Economics Under Monopoly. In Lucy, ed. Understanding Economics. 2nd ed. bath: Jackie Publishers. pp.55-70. Shinu, H., 2005. Oligopoly in australia. Research work. Dokalam: H.G Publsihers TTR university. Webster, M., 2013. Micro-economics. In Kerry, ed. Economics in a nation. 2nd ed. London: L.P Publishers. p.2.