Essay --

(a) Deadweight going, or as termed in the question, welfare red, is the loss of consumer and producer superfluous as a result of ineffective market place activity, including monopolistic rivalry. According to the Theory of the Firm, monopoly tycoon includes a a great deal higher barrier of entry, which further impedes aspiration by increasing the start-up equal, which essentially creates high product footings, compared to the firms, which hold the monopoly power of production, and have already found production. As a result there a loss of fatty and allocate efficiency, thus encouraging welfare loss, by decreasing consumer surplus due to limited competition and subsequent monopoly powers, which enable clear-maximization at a small production output, creating a deadweight loss.(b)By using anti-monopoly legislation and price regulations, two different forms of political relation interventional policies that are utilized to offset the market inefficiency, and subsequent lo ss of welfare, which monopoly power encourages, governments are able to reduce monopoly power in a sector of economy. The diagram below compares monopolistic competition and perfect competition As the diagram above illustrates, the monopolistic profit maximization lies at the average market cost, representing a colossal deadweight loss in the triangle formed by ATC, AR and Monopoly Output. To combat this, trim down welfare loss by increasing output and lowering prices, government intervention may prove an efficient method of solving the worry of monopoly. By legislating anti-monopolistic policies, for example lowering barriers of entry to encourage competition that was previously unsuccessful due to the monopoly-induced high barriers of entry. This would profit companie... ... directly allocates silver to purposes of increase economic development, then they unconsciously limit the growth, which the nation give experience, because the financial resources have been used for seco ndary purposes. This can be exemplified in several socialists economic measures, such as taxation, transfer payments, indirect taxes, lush government expenditure, with which the government aims to improve equity and income equality, but at the cost of economic and financial growth. However, taxation and transfer payments, will reduce the utilisation of scarce resources of human labour, in the sense that it might limit the undivided incentive to work, when the state offers alternative ways of income. This is observed in countries with large taxations, where transfer payment represent a living for many citizens, once again with reference to the Scandinavian countries.