Market Structure You Believe Wal-Mart Essay

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Mergers can also help at least come domestic companies become competitive with international ones. Mergers potentially free up increased money for research and development.

Yes, it is possible for mergers to be beneficial overall. There is no blanket yes or no judgement that applies to whether or not mergers are beneficial. They are generally beneficial if the above conditions are met along with the following conditions: There remains sufficient competition that the newly formed company cannot enforce monopolistic conditions and that there remains freedom of entry into the market sector for new firms.

3. Why are competitive markets considered more efficient than monopolistic markets? Give economic reasons. Give a real-live example of a market that tends to be competitive and one that tends to be monopolistic. Describe characteristics that support your classification. Is there evidence of efficiency or inefficiency in either of the markets you describe?

Competitive markets are considered to be more efficient than monopolistic markets because when companies have to compete with each other they will be forced to charge as little as possible so that they will not be undersold by other companies.

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In order to be able to charge low prices but still make a profit, companies have to be efficient. An example of a competitive market is mattresses. There are thousands of mattress stores (or stores that sell mattresses) in the country and numerous manufactures of mattresses. There is no chance that any single manufacturer or retailer will be able to gain a monopoly on this product.

A monopoly exists when a single entity has the sole power to sell or distribute a product. An example of a monopoly in today's economy is a municipal utilities company since it is the only entity that can sell energy to residents in its purview......

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