Analysis of Micro Economy in Australia †MyAssignmenthelp.com

Question: Discuss about the Analysis of Micro Economy in Australia. Answer: Introduction In this particular report, the overall analysis regarding the micro economy of the country Australia has been significantly discussed. Here the aspects of monopoly, duopoly, and oligopoly market in Australia have been significantly highlighted in order to judge the current commodity market scenario of the country. Thus in order to formulate all the judgement a mere analysis through representing different diagrams has been emphasized in order to depict the feasibility assessing the research. a sectional overview of the respective market has also been analyzed so as to perceive the ideas generated from the overall considerations. Explanation of markets prevailed in Australia Generally, the market structure in any economy entails significant characteristics in the recent period of time. There are four types of markets like perfect competition market, monopolistic competition market, oligopoly market and monopoly market. There are also significant perception upon some other markets like duopoly, monopsony. Therefore, the significant description regarding the markets in Australia has been revealed so as to perceive the ideas regarding how the market has been operated determining the products and services (Nabin, et al., 2014). Monopoly market depicts that the aspects of the market competition where the only one firm operate through producing goods. In this respective market, there exists only one producer, which can produce goods, and it has not contained any substitute product that can generate any competitive structure. Theoretically, it has been sufficed that the monopoly market has formulated one single supplier in the market with numerous customer who can easily purchase the products. Only one supplier through entailing the supply of goods has controlled this market and apart from this, the supplier can also control the respective price of the products. It can be said that that oligopoly market has significantly determined the aspects through controlling the business operation through large suppliers that are small in numbers through dominating the market in which the firm sold its product. Generally, oligopoly can be differentiated with monopoly market through intervening the feasibility of large num ber of suppliers rather than the monopoly, which constitute only one firm (Julien Musy, 2015). This particular market has also constituted minimum rival firms operating in the market. This type of market always persist competition in accordance with the price and non-price aspects within the firms. This has been perceived because the firms produce homogeneous goods through which the product differentiation may occur in different situation. Another interventions assessed through oligopoly market is entailing the decisions independently through firms production. Thus, the assumptions are important to secure effective decision in accumulating profit by selling the products. The duopoly market has incessantly embedded the aspects that analyze the behaviour of oligopoly market. It has been assessed that there exists interdependence between respective firms (Hattori Tanaka, 2016). The assumptions considering the market size, which remain constant, derive loss of one firm that equals to the value of profit achieved by another firm. Thus, the firms have to forecast about enhancing the market share or to encapsulate a constant market share in the respective country. This has significantly determined the game theory in the duopoly market. Considering this feasibility, Australian economy has endeavoured with all these market interventions, which readily outflow the commodity production and sales to their potential customers through acquiring excess profits (Simshauser Whish-Wilson, 2017). Evaluation of the market through economic concepts In the respectivemicro economic market environment of Australia, there exists some interventions which has been aroused through the consequences, that encircles various functional strategies. If we consider the monopoly market competition, then an organization or a firm will face the aspects of normal profits with the potency to achieve super normal profits. Apart from this, the pricing strategy with allocative efficiency within the products of the firm has been intervened. Moreover, the significance regarding the barriers to entry has been considered. Nevertheless, the price discrimination in the monopoly market has been considered to be much more significant characteristics. Even though duopoly has no such determinants that can regulate the market structure, but oligopoly market has intervened the aspects of price wars among the firms (Hazledine, 2017). Moreover, the price leadership is considered to be embedded upon the oligopoly market in order to determine the profit achieved by the firms through selling the products. The kinked demand curve has also been ascertained through oligopoly market determinants. In the country Australia, busting monopolies is considered as one of the most crucial job of government. This has been regulated through the aspects of monopoly, that has to be charged. The government of Australia has prevented the monopoly and oligopoly formation by pertaining competition laws. However, it has been analysed that monopoly has existed its significance in the Australian commodity market resulting into only one product seller with an uncommon product (Tyers, 2015). Only one firm Telstra has achieved the monopoly in the telecommunication industry of Australia, which has owned the network of copper wire assisting in transmission of telephone calls and internet services. Generally, monopoly market is certainly different from duopoly and also oligopoly market. There exists the dominance on behalf of two firms in the market with differentiation i n the products or its respective range. Thus, the grocery prices among the supermarkets of Australia like Coles as well as Woolworth maintain a cosy duopoly structure in the market. Analysis through different charts and diagrams In this respective section, the analysis of the different market structure has been pertained. From the diagram, it can be stated that in the monopoly market, a firm can be price taker or a quantity maker. Therefore, if price of the products can be reduced, then the sales have been increased. Thus, by increasing unit sales, the average revenue or AR curve falls and the marginal revenue will be lower than average revenue. Thus the AR curve is always downwards sloping which the sales has been increased. In the oligopoly market, the significance of price cartel can be demonstrated with the help of the diagram highlighted aside. This has been pertained through the consequences where all the firms operating in the market agreed to perceive fixed price at which the products will be sold. Now whether the market is considering to sell the product at lower price for meeting the demand, the cartel will significantly impose high price through restriction all the supply of the products. Thus, the firm can easily increase the profitability if all the firms control the respective prices (Lin Matsumura, 2017). Bibliography Hattori, M., Tanaka, Y. (2016). License or entry with vertical differentiation in duopoly. Hazledine, T. (2017). Mixed pricing in monopoly and oligopoly: theory and implications for merger analysis.New ZealandEconomic Papers,51(2), 122-135. Julien, L. A., Musy, O. (2015). A Review of Heinrich von Stackelberg's Book:Market Structure and Equilibrium. Lin, M. H., Matsumura, T. (2017). Optimal Privatization Policy under Private Leadership in Mixed Oligopolies. Nabin, M. H., Nguyen, X., Sgro, P. M., Chao, C. C. (2014). Strategic quality competition, mixed oligopoly and privatization.International Review of Economics Finance,34, 142-150. Simshauser, P., Whish-Wilson, P. (2017). Price discrimination in Australia's retail electricity markets: An analysis of Victoria Southeast Queensland.Energy Economics,62, 92-103. Tyers, R. (2015). Service Oligopolies and Australia's Economy?Wide Performance.Australian Economic Review,48(4), 333-356.