Disadvantages And Disadvantages Of Globalization
Antitrust laws – has other expression "competition laws" or “anti-monopoly law” - are announcements stated by the United States of America Government to protect consumers from greedy firm’s exercises by guaranteeing that perfect competition exists in an open-market Today antitrust law is irrelevant to talk of a “United States company” or a “German company” when the project’s factories are in India, its computer programmers in Malaysia, and its managers employed worldwide
The disadvantage of monopoly:
According to Markovits in his book “Economics and the Interpretation and Application of U.S. and E.U”, chapter 8, page 254 to 265, the main disadvantage of monopoly; and how to overcome monopoly.
Monopolies utilize their position by putting high prices, because consumers have no other alternatives for their offered product. This is especially challenging if the product is a basic essential, such as: water.
Monopolists can moreover limit output or the products onto the market over a period of time, or to drive up price (as keep the products away from the market until it become scarcity and the people demand it, in order to get much more profits).
Lower consumer …show more content…
Loss of the welfare: is the loss of society benefit, from consumer and producer surplus sides, that happens when a market is supplied by a one supplier rather than a huge number of competitive companies
Monopolists can employ fewer workers than in more competitive markets. Employment is mainly determined by production – the more output a firm manufactures the more labour demand. As output is lower for a monopolist it can also be understood that employment will also being less.
How to overcome/avoid monopoly:
Breaking up the monopoly firm into several smaller firms; For example controllers in the EU are currently examining potential control of market dominance by Microsoft, which is under risk of being broken up into two firms – one for its software and the other for operating systems.
Let the national public government being controlling monopoly firm – which called ‘nationalization’. The ultimate preparation for an abusive monopoly is for the country to take a calculating interest in the firm by obtaining over 50% of its shares, or to take it over totally.