The film shown was indeed very comprehensive and educational. It provides a lot of learning about the different aspects of the economy. It is reviewed that the three ranges of firms are proprietorship, partnership and corporations. However, the ones given emphasis are on the diverse competition in the market. First is the perfect competition that is composed of many small firms with homogenous products. The sellers in this kind of market are price takers and can have an easy entry and exit. They earn normal and profit is somewhat low.
The next is its opposite extreme, which is monopoly. This is comprised of one single seller who takes almost all sales. They have the power to put the product’s value above the market price and this depends on the elasticity of demand. Monopoly exists for some barriers that hinder other firms from entering the market; examples of these are patent, and mergers. Another type is oligopoly that is composed of small number of firms and thus they have almost all the revenue in the market. Lastly is the monopolistic competition, which has many firms, competing with different products. Yet, they not much power to raise the price like the monopoly.
In addition, the anti-trust and anti-competitive behaviour was discussed. It serves as an act against monopoly. The Federal Trade Commission and the US Department of Justice are the ones in charge with the system. They have the power to review any merger and decide whether to block, allow or allow but set some conditions before approval.
Competition certainly is the ultimate way to favour consumers. Firms tend to incline into making market strategies to differentiate their products from others. These strategies, I say, is much favourable for the buyers to avail high quality and cost-effective products. I believe the perfect competition and monopolistic competition offers these advantages among the consumers in the market. This is one good thing about them.
The goal of anti-trust also gives the people a great favour. If huge firms would keep on merging and results to giant monopoly companies, they would probably control the market themselves. Buyers would be just mere price takers and left with no options in buying the products. They have no choice but accept the value they have to pay even if it is above the market range. Also, the small firms would be deprived with their chance of earning for their operations are smaller than those huge ones. They would have a hard time covering up for their loss.
Truly, the government is making its ways to equate the flow of market competitions. It is a good thing that they see to it that even small firms would have their opportunity in making profit and that consumers would avail the products at a justifiable prices and quality. A healthy market competition is what everyone needs for a healthy economy.