Oligopoly and Resource Allocation 1. Resources are the means to achieve certain ends.
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The free Economy research paper Monopolies Effect on Resource Allocation in Industry essay presented on this page should not be viewed as a sample of our on-line writing service. Whether this is true or not, depends on the specific company, but certain characteristics are possible to define.
It is these I will describe in the following, and hence conclude if monopolies worsen or improve resource allocation.
It is important to distinguish between competition and monopoly before describing advantages and disadvantages of both. Many monopolies are government owned. This means that the incentive to strive for more profit, better conditions etc. This is due to the fact that, if there is a loss, the government will cover it, and government owned companies seldom strive to achieve maximum profits.
A lot of the characteristics are also seen in privately owned monopolizing firms. When they become so big, that competition is practically gone, the incentive to make even more profits, and being innovative diminishes. In a competitive industry this is not the case. The fear of loosing your job, not being able to compete, your products becoming obsolete etc.
It is therefor obvious that the competitive industry will try harder to allocate their resources in the most efficient way. The monopoly owned by the government, would never be able to ignore such a serious matter, and they would have to pay the costs.
A monopoly would also have to be careful not to damage its image, seeing that is, in many cases, already is unpopular. Capital, on the other hand, is often to the benefit of a monopoly, since they produce at a large scale. To fully utilize capital, a lot of labour is needed, labour which a monopoly is expected to have, and a smaller competitive firm may lack.
For example, a blast furnace might need a crew of 24 men working night and day, to fully utilize it. The monopolizing company may be able to provide the men, but the smaller firm might not have the money to hire all the 24 men at night, seeing wages are much higher at then.
The question then is if the competitive company is so much more efficient due to hard work, that they still can produce more than the monopoly. When it comes to labour, it is obvious that a competitive industry will strive to utilize the workers at a maximum level, due to the desire of minimizing costs, and workers will in general be very efficient due the reasons mentioned above.
The workers in a monopoly, often loose the feeling, that their work makes a difference in the firm, making it hard for managers to fully utilize the them. In my opinion, the characteristics described above are not as valid any more. Bill Gates, owner of MicroSoft, has very admirable policies concerning this.
His firm is not a monopoly, but it is definably a cutting-edge firm, which is shaping the future.
It is his goal to make his own products obsolete, not letting others do it, and it seems he is achieving that goal. Allocating resources in monopoly does not have to be worsening, but times change and so must management. Essays, term papers, research papers related:Mar 21, · Therefore, it will not deal with healthcare resources as understood in the material sense, but only with the human side of the equation, ie, it will deal only with the nature, role, and ethical status of the healthcare professions and with the implications that this has for resource allocation.
Monopoly and Resource Allocation: Monopoly is a market situation in which there is only one firm producing and selling a product with barriers to entry of other firms.
The monopoly product has no close substitutes which mean that no other firm produces a .
Resource allocation “refers to the way in which the available factors of production are allocated among the various uses to which they might be put”. The allocation of resources enables us to determine how much of the various kinds of goods and services will actually be produced.
So the monopoly profit, the blue shaded area, or the blue rectangle, is what the monopolist picks up from being able to now exercise monopoly control .
Monopolies Effect On Resource Allocation In Industry Monopolies are under constant critics from the public and other producers of being polutive, straining to competition and they are accused of worsening resource allocation.
Monopolies Effect on Resource Allocation in Industry Trace The Development Of Strategic Human Resource Management From The Resource Based View Of The Firm. How Does The Resource Based View Of The Firm Facilitate And Inhibit The Actual Practice Of Strategic Human Resource Management.