The potato chip industry Essay Example | Topics and Well Written Essays - 1000 words

The tater separate industry - Essay ExampleThe change in the market structure of the white potato vine chip industry leave alone have a few effects upon the stakeholders. A monopoly market structure tends to adventure the freedom of the consumer, provided tradinges can enjoy the advantages of a pure monopoly while at the same prison term protecting the consumer from subsequent exploitation characteristic of a monopoly. Characteristics of a Competitive Monopoly A monopoly competition is characterized by a number of distinct values. Normally, there exists a number of small businesses that produce identical goods but with minimal differences. These small firms end up having competition for their products in the market. Some of the hurdles that entrants of a business line or an industry have include barriers involving government policies, creation of demand for products, research and knowledge costs, and start-up and so on. However, in the case of a belligerent monopoly, the f irms involved do not have set about these (Ackerman, Goodwin & Weissskopf, 2009). Due to the demand created for their products. More often than not, demand exceeds supply for the product in question and indeed the business try to compete for a larger share of available demand. In relation to this, the potato chip industry had a monopolistic competition for their products before the lawyers came and took over the industry. The market structure for the potato chip industry experienced minimal price control due to the reason that it was a competitive monopoly. Effects of Pure Monopoly to the Stakeholders Every business has a number of stakeholders, who may have interest in the company due to one or more reasons. The stakeholders of any company include, but are not limited to consumers, suppliers, government, creditors and owners/shareholders. A pure monopoly market affects the stakeholders in different ways depending on the benefits that they attain from their kin with the company ( Hall & Liberman, 2001). When the two lawyers bought up the entire industry, they wanted to be able to exercise pure monopoly in the potato chips industry in Northwest region. Particularly being the sole owners of the entire industry in the region, the partners are able to enjoy price control to the detriment of the consumers of this product. This way they can maximize their profits. The consumers of the potatoes in the Northwest region will have several major adverse effects from the monopolistic practices of pulverization Company. Firstly, the prices of the potato chips will shoot up meaning that the consumers will spend more for the same products that were at a time affordable. For the reason that Wonk Company does not experience competition, it is possible that the products will decline in flavor and as a consequence the consumers will suffer the effect. The suppliers from whom the potato chip businesses bought their products will also experience a hit. Wonk Company will attemp t to practice price control of the products that they acquire from their suppliers. As a result, many of the suppliers such as farmers will have to look for alternative markets for their potatoes. Otherwise, Wonk will buy the products at low prices and farmers will suffer the effects of the monopolistic market. Impacts of Monopoly on Prices, Output and force Davies puts forward the fact that