In 2007, the potato chip industry in the Northwest was competitively Research Paper

In 2007, the potato chip industry in the Northwest was competitively structured and in long-run competitive equilibrium firms we - Research Paper Example The lawyers hired a firm to estimate varied long-run competitive equilibriums to ensure the successful operation of their business (Swanson, 2009). However, the adapted strategies may not be superior and appropriate. Benefits to the government, business and consumers A monopoly market occurs when a single company supplies services or products that the buyer cannot substitute. The situation mainly happens when one company supplies commodities cheaply compared to other companies. Most monopoly companies include the utilities that offer electric power, gas or water. Wonks would benefit different stakeholders especially the government, business and consumers based on its monopolistic tendencies. Initially, the company will benefit the government because monopolies act as convenient sources of revenue for the government. The government can force companies out of the market causing controversy in the marketplace. The administrators at Wonk can force the government to come up with restricti ons governing the market competition (Graham, Kaye & Rothstein, 2006). However, other companies in the market can propagate negative publicity that may serve as a barrier to Wonk. As a result, the total revenues of the industry to the government will increase Once the firm started running as a monopoly, it came up with different Long-Run Competitive Equilibriums (Graham, Kaye & Rothstein, 2006). These changes benefitted the industry’s stakeholders because they controlled the amount of goods released to the market. Additionally, the industry can control its production, supplies and selling prices to the consumers (Graham, Kaye & Rothstein, 2006). The absence of competition means that the company could increase prices to cover the cost of production. Consequently, the parties involved will draw additional revenues. The consumers will also because Wonk will stipulate prices that the consumers are willing to pay. Graham, Kaye & Rothstein (2006) indicate that the consumers will st op purchasing the products when the industry stipulates prices that the consumers are unable to pay for the goods and services. Changes in prices and output in both structures The potato chip industry restructured from the monopolistic competition strategy to strict monopoly. The competitors sell slightly heterogeneous products but compete for the same customers based on monopolistic competition (Graham, Kaye & Rothstein, 2006). This strategy presents reduced obstacles in market entry and exit. This means that the company was exposed to threats of competition and market fluctuations in the external market. The reduced market entry barriers had the potential of destabilizing the business if a more preferable competitor enters the market. Through monopolistic competition, the producers were constrained from acquiring the full market information (Graham, Kaye & Rothstein, 2006). This is because the market has inputs from other competitors that influence market fluctuations. Any new inp ut by the competitor affects the demand curve of other competitors. Consequently, the consumers must determine the price and non-price attributes of the products supplied. The competing producers must select unique traits that attract customers to their products and realize the targeted higher prices (Boyes & Melvin, 2012). Monopolistically competitive markets engage in imperfect competition by focusing on non-price competition aspects such as product