Demand And Supply Case Study Example | Topics and Well Written Essays - 1750 words

Demand And Supply - Case Study Example ld. (Harberger, AC) In an attempt to completely understand and describe the monopoly, causes, types and relevant issues, it becomes necessary to approach the subject from as a simplistic nature as possible, to stay aligned with the underlying microeconomic structure. Based on the fact that within the market place the root of everything comes down to supply and demand, this is altered by monopolistic practices and therefore society tends to disfavor monopolies as practicing on an unfair basis, and creating barriers of entry to firms wishing to enter the market for profit generation, as well as from the perspective of the consumer, being that the monopoly is unfairly regulating prices, by restricting output and therefore is extracting a price without allowing market forces to determine the correct supply and demand balance of the given commodity. Essentially when dealing with a monopoly consumers are at the mercy of the price determination of that monopoly, which they control via total output restriction and subsequent economic welfare reduction. The Existence of the Monopoly The monopoly comes about when there is little or no competition, normally the latter. The monopoly will always persist based on the barriers to entry for any rival company or concern attempting to enter the market place. Barriers to entry protect a monopoly and at times can even be state sponsored, via legal framework or even finance. The barriers to entry for rival firms include: Legal Barriers – these take the form of legal framework where a government will only allow a producer to supply a product, for example if one considers the first class mail deliver in the United States which USPS is the only allowed deliverer. Patents – similar to legal barriers due to the legal framework that will support a holder of a patent, although this issue is debatable around the cost of research and development in the patent creation process. A certain school of thought agreeing with the pate nt barrier, claims government encouraged innovation incentive, whilst others will claim consumer deprivation due to excessive price fixing. Examples would be the pharmaceutical companies that hold patents on medical drugs, Pfizer who manufactures Viagra – they are the patent holders and are therefore the only company entitled to produce and sell the drug. Control of strategic resources – this would entail a holder of mineral rights or mining rights of a commodity that must be present in order to produce the end product. An example is De Beers controlling 90% of the world’s diamond production (Wessels, W.J). Natural Barriers – also called economies of scale. This is related to the mere cost of establishment within a given industry. It is too expensive and capital intensive to enter the market on a profitable basis. An example of this would be the various utility companies in any given economy. One can safely deduce that monopolies will continue to exist, a s long as there are governments who sponsor such activity, as well as when companies are in the position to be able to create a barrier to entry, via

Methodology paper for PHD research, the proposal is ready but the Essay

Methodology paper for PHD research, the proposal is ready but the methodology needs to be amended - Essay Example As the Gulf countries traded with the world, they have gained both capital and expertise to go beyond the passive investments that have dominated the flow of capital in the region in the past. Legrenzi and Momani have pointed this out, arguing that the profits accumulated from the years of stable and high oil prices have enabled the GCC states to have a wider range of investment choices. (p20) A parallel development is the perception that BITs have or will create a special limb of international customary law. (Dolzer and Schreuer, 2008, p2) It has been argued for the most part that BITs have evolved to such an extent that they have their own unique regulatory laws within the wider scope of international commercial laws. (Dolzer and Schreuer, p2) This expectation led to the favorable attitude on BITs. Sornarajah, however, raised an interesting point warranting further exploration and research. According to him, the fact that there has been an increase in BITs for some time and no lega l standards has been established as yet should already demonstrate how these treaties have not been able to create the â€Å"customary principles of international law† for protecting the movement of foreign capital. ... Oil prices, for its part, has now become relatively impervious of late as the highly integrated international system become more and more strict in addition to how the world is scrambling to tap alternative energy sources. Therefore, the need for BIT regulation is underscored. Aside from intelligent investment decisions, the GCC member-states have used regulatory mechanisms to control international capital movement especially concerning the BITs in a bid to prevent and mitigate risks and threats. This paper will explore this theme. The aim is to outline the current capital movement landscape, identify the regulatory mechanisms that govern it (i.e. statutes, treaties, etc.) and assess their strengths, failures, points of opportunities and challenges. 2. SOURCES AND DATA ANALYSIS This research uses several approaches within the qualitative method of inquiry. The sources of the information, hence, are composed of both primary and secondary data, which will often be referenced in order t o outline specific cases and important statutes that govern BITs. These sources can include academic journals as well as other texts published on the subject (i.e. published dissertations and news reports), Internet sources in addition to data available from corporate websites among other documents released and published by organizations, individuals and documents from the GCC governments and their agencies. Relevant information from international organizations will also be used. In addition, this study will also conduct interviews on selected resource persons, which could be composed of legal luminaries, specializing in the GCC jurisprudence, investors, policymakers and other stakeholders that are authoritative in discussing the GCC BIT subject. The number of these resources would