Explain the relationship between monopoly as a form of economic competition and the failures of communism as an economic system
What will be an ideal response?
A monopoly occurs when there is only one provider of a good or service and no substitutes for the good or service exist. Because there is only one supplier, there is less abundant supply in general and the supplier is more susceptible to changes in resource prices. In the communist system, the government is the sole supplier of all goods and services across the economic spectrum and is responsible as well for controlling prices and distributing those goods and services. The entire economy (rather than just a single product or service) is therefore in some sense a monopoly, and because competition is limited to nonexistent, motivation to produce goods can be limited and severe shortages of goods and services may result.
You might also like to view...
JJ's Hair Salon pays overhead each month, including bills for rent, heat, interest, and salaries. These payments are examples of ________ costs
A) total B) average C) activity-based D) variable E) fixed
Wheelwright and Clark provide a model which emphasizes cross-functional integration and provides the primary activities of engineering, marketing, and manufacturing for each development phase
Indicate whether the statement is true or false
A shortage of capacity (or inventory) occurs when
A) there are excessive cancellations. B) there are few cancellations. C) an expensive backup needs to be arranged. D) B and C only
Limitations of online travel services include
A) limited amount of free information. B) substantial discounts. C) the difficulty of using virtual travel agents can be very large. D) increases in provider's commission and its processing.