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

The stump spud buffalo chip perseverance - Essay ExampleThe change in the market structure of the white potato chip industry will commit a few effects upon the stakeholders. A monopoly market structure tends to risk the freedom of the consumer, but businesses can enjoy the advantages of a thin monopoly while at the same time 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 experience include barriers involving government policies, creation of demand for products, research and development costs, and start-up and so on. However, in the case of a competitive monopoly, the firms invol ved do not have experience these (Ackerman, Goodwin & Weissskopf, 2009). Due to the demand created for their products. More often than not, demand exceeds bring out for the product in question and therefore 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 gibe 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 lodge 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 unalike ways depending on the benefits that they attain from their relationship 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 blemish 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 Wonk Company. Firstly, the prices of the potato chips will shoot up meaning that the consumers will spend more for the same products that were once affordable. For the reason that Wonk Company does not experience competition, it is likely that the products will decline in quality 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 attempt to practice pri ce 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 Efficiency Davies puts forwards the fact that