Chapter 24 Summary Essay Example | Topics and Well Written Essays - 500 words

Chapter 24 Summary - Essay Example s of scale which discourage other competitors from accessing or thriving in the market are hard to come by but are however in place by some specific companies and producers in the world. Focusing on the conditions of market that a monopolist faces that influence the level of demand and marginal conditions in this particular market is the point of concern. The closest contrasting market that can be used to gauge the level of marginal revenue of the monopolistic market is the perfect competition market structure. In the perfect competition market, there exists a huge supply of both customers and suppliers in that; the demand and supply is equal and none of the factors influencing supplies overshadows the other. Due to this balance in terms of demand and supply, a single vendor of the particular goods or services cannot dictate at which prices his/her commodities will sell for. The forces of the market are the ones that dictate the price in the market. The monopoly market however has control over the prices of his/her goods and services. This however is put under the check and balances that influence demand and supply which is not the case in the perfect competition ma rket. For the monopolist to achieve a hike in prices while maintaining the levels of units sold, he/she has to tone down on the price per unit. The difference between the initial revenue and the revenue to be realized after reducing the cost of the final unit batch is what is referred to as the marginal revenue. Due to the downward sloping curve in demand that is experienced by the monopolist, the prevalence of special conditions to fix the deficit in profit accumulations is made by the monopolist. The monopoly thereby has to consider the difference that is created in profits one he considers the marginal revenue approach of raising the number of units sold so as to increase the level of profits. He therefore has to measure the point at which the total revenues and the total costs tally so as to