Business environment Coursework Example | Topics and Well Written Essays - 250 words

Business environment - Coursework Example Features are one seller, many buyers, price setter, restrictions on entry, high sunk costs and enjoys economies of scale. A monopolists has the following pros, no wastage of resources, can venture in to research, and easy to adopt to new technology. The disadvantages are low quality service, no sovereignty of consumers and there is consumer exploitation due to high prices. The price is set by the producer in the short run and not in the long run. That is at P = MC as shown by the diagram above. The structure has features such as, independent decision making, imperfect information, an individual decision affects the market, free entry and exit and firms set prices The above diagram shows the kinked curve. The price is set where P =MC or at the kink of the demand curve. The decision of a single producer can affect the entire market, therefore, coalitions exist to set the price of the goods (McConnell &Brue, 1995). The features include few large firms many buyers, firms collude, high restrictive barriers to entry and dependence decisions. The advantages are makes huge profits, can lead to innovations and stable prices. The shortcoming include dependent decisions, high entry barriers and poor quality (Baligh &Richartz,