Understanding Supply and Demand, the Existing Competition, and Government Regulations

Reflection of an Article on Micro Economic
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Reflection of an Article on Micro Economic
Understanding supply and demand, the existing competition, and government regulations will play an instrumental role in a company's success. The article under review has highlighted the different factors that affect businesses, such as supply and demand, Perfect competition, Monopoly, Oligopoly, Monopolistic Competition, Government regulation, and Prices. The article has been critical in analyzing the supply and demand structure of the free market. Free markets are supposed to operate free from government intervention (Wolf, 2020). It is essential to have a market where there are willing buyers and willing sellers. However, the author of this article claims that there are instances where a few individuals control supply and demand.
In perfect competition, the organization is supposed to be price takers. The main characteristic of this market structure is that many people are producing the goods (Gretsky et al., 2020). As a result, people cannot set the prices for their products. However, Wolf disagrees with the assertion that a perfect competition market exists. The idea is noble, but corporates have found a way to avoid being price takers. A majority of companies are price makers because of the lobbying that takes place in Congress. The representatives of companies play a vital role in the government's policies by supporting politicians through political campaign donations. The essence of perfect competition is thus eliminated because of such lobbying.
Government regulations play a critical role in making sure there is fair competition in the market. Companies that are a monopoly are prevented from taking advantage of the ...