Through utilizing this control strategically, a profit-maximizing monopoly could create the following societal risks: The accumulation of power and leverage on behalf of the suppliers largely revolves around the fact that monopolies can ultimately control supply in its entirety for a specified product or service. In order to ensure that suppliers do not take on too much power (such as the case of monopolies and oligopolies), government regulations and antitrust laws are a necessary component of the economic perspective. The farther an industry or market moves from a perfectly competitive model the more value is potentially migrating from the consumers to the suppliers. As such, the perfect competition model is most useful in identifying and measuring deviations or departures from the competitive ideal. However, perfect competition is more of a theoretical competitive framework because markets will naturally deviate to varying degrees (in order to capture profitable returns). While this is an idealistic representation of markets, it is useful as a frame of reference to identify departures from ideal competitive circumstances. Note that the overall returns derived, costs incurred, quantity produced, and price point all align perfectly to generate an equitable market position. Perfect Competition Economics: This is a graphical illustration of economics within the context of a perfectly competitive market (theoretically). This allows for revenues, costs, price, and quantity to achieve a balance where the consumer is provided with the optimal amount of a good at the most equitable price. In a perfectly competitive market, the antithesis of a monopoly, demand is completely elastic and the production quantity and price point align perfectly with marginal costs and actual costs. To understand why trends towards consolidation are so dangerous it is useful to frame why competition is of such critical value to equitable markets, particular from a consumer perspective.
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