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Monopolies, Monopolistic Competition, Oligopolies, and the Perfectly Competitive MarketNameInstitutionDate1|PageMicroeconomics theory first addresses the pricing of products. The theory holds that its demandand supply determine the pricing of a product. Also, the theory posits that the cost of productionaid in determining the break-even point (BEP) of a product hence the price. The second aspect ofthe microeconomic theory is on the factor pricing also known as the theory of distribution. Thetheory argues that factor pricing is influenced by rent, wages, interest, and profits. The thirdaspect of the theory is on economic welfare where it holds that the allocation of resources has tomaintain social welfare (Feldman, 2012).In that account, a monopoly is a market that consists of only one seller. Monopolies come forthdue to their ability to dominate the Market owning up to 90 percent or more of this very marketthey exist in. What has made this permissible lies under the inability of other firms to come upand compete with the monopolies (barriers of entry) on the foundation of capital, cost advantage,product differentiation, and control of resources, patents and strategic barriers. Capital looks intothe high- cost resources that are needed to set up some firms or organization; the higher thecapital, the higher the risk (Sowel, 2006). Translating into the minimal entry of other firms intothe same market because of the risk involved. Cost advantage looks into t ...


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