Read the following article and answer these questions in par

Read the following article and answer these questions in paragraph form: 1) 2) 3) What is the article about? How does it relate to Economics, what topic is specifically being discussed? What is your opinion?

Solution

a)The article is about perfect competition operation operating in the market. The market is moving fromperfect competition to monopoly, as inspite of being large number of competitors operating in the industry,the power is concentrated only in the hands of few big players. The market is dominated by these big players and maximum market share is coveerd by these major players only. For example, Walmart has major market share in retailsales, Amazon is aleading player in online slaes, and Facebook is leading in social media.

b) Major players like Walmart, Amazon have maintained their leadership position because of the high quality product offered by them and low cost of the products offered by them. Firms are able to achieve economies of scale as they prodcue and purchase in bulk quantities directly from the manufacturer and are thus able to reduce the cost of production.The benefit of economies of scale in the form of low cost is passed on to the consumer by making the product available at low price. Thus they are able to retain the customers and maintain the leadershipposition.

c) As per my opinion, major players like Amazon,Facebook, and Walmart are taking away the share of small players.Major players have high financial backup and thus purchase and produce in bulk quantity, thus achieve the economies of scale and able to redudce the cost of production, whereas small players are not able to do it as they do not have high financial backup.