Monopoly and its Impact on Economy and Government

MICROECONOMICS
MACROECONOMICS
Table of Contents

INTRODUCTION.................................................................................................................................3
Question 1.............................................................................................................................................3
a) Monopoly is problematic for country and government..............................................................3
b) Public policy can curb monopoly...............................................................................................3
c) Curve demonstrarting how monopoly make unusual profit.......................................................4
Question Two....................................................................................................................................4
Question Three......................................................................................................................................5
Question 4.............................................................................................................................................6
a) Graphical demonstration of supply of labour in US affected by increase in labour force..........6
b) Other factors causes labour supply curve shift...........................................................................6
Question 5.............................................................................................................................................7
External effects..................................................................................................................................7
Question Six..........................................................................................................................................7
Question Seven......................................................................................................................................8
Question Eight.......................................................................................................................................9
REFERENCES....................................................................................................................................11

INTRODUCTION
Microeconomics and macroeconomics are the two different aspects of economics
comprises with various principles and concepts related to the economics. This report will
discuss about different case scenarios reflected different aspects of economics. Henceforth,
report will emphasis over monopoly concept of economics and the facts that can demonstrate
that why monopoly is a problematic situation for an economy or government. Examples will
be given over the public policy that can curb monopolies. Utilising cost curve to demonstrate
how monopoly make unusual profit for the business entity. Equilibrium price and quantity
concept will also discuss under this project. Income elasticity of demand will identify under
this project. Labour supply in US will also demonstrate under this project. Factors causes to
labour supply curve shift will also discuss under this project. Furthermore, this project will
discuss about the external effects. Impacts of rising prices of oil will demonstrate over the
demand of the same. Ways to control money supply will also discuss as a part of this report.
How interest rate affect over economy will also elaborate. Causes of global financial crisis
between 2007 to 2009. UK government policy to face the economic crisis will also discuss
under this project.

Question 1
a) Monopoly is problematic for country and government
Monopoly is a situation in the market were there is only seller of the respective
product. There are many examples has been restored of monopoly such as Saudi Aramco and
many other (Kozlov And et.al., 2019). This is certainly stated fact that where monopoly
existed the organization or business entity get dominate the whole market in its own term as
the organisation is the sole producer of the product or service. This lead the business entity to
aggressively influence prices of the product that create a huge problem for government as
well economy of the country.
b) Public policy can curb monopoly
Government has all its rights to formulate policies to control the entire market.
Companies even in the monopoly market has to deliver all operations and functions of the
organisation as per government policies and regulations. This is a certain act that with
support of policy making government can create a better environment or space for other
business entities to enter into the monopolistic market (Lizunkov and et.al., 2021). This is the
reason why economist always state that there is not any proper or complete monopolistic
market exist. For example 1890 Sherman Antitrust Act could overcome the monopoly of
some of the monopolistic organisations in standard oil, tobacco, steel and such sectors.