The paper "Market Competition and Economic Performance" is a good example of a macro & microeconomics essay. Most economists argue in support of competitive market over monopoly. According to Hildebrand (2009) in a competitive market, competition tends to lead to cost efficiency, relatively lower prices and increased innovation. For markets that are competitive, creates a higher level when it concerns consumer welfare in both the short and long-run when compared to markets that are not competitive. On the other hand, monopolies are identified to be bad for consumer welfare.
To compare benefits achieved from either competitive markets or monopolies, it is important that we compare the outcomes for consumers for both markets. The advantage of competitive markets over command-and-control systems is well identified. However, it seems to be difficult to provide experimental evidence in regard to the effect of increased changes in the strength of recompense for collective economic performance (Moschandreas, 2000). Moschandreas believes it is partially because market competition is only one among many issues pressuring key cooperative performance indicators, for instance, increased output and employment. On the contrary, there exists an experiential connection between strong competition in markets for goods and services and better productivity and employment outcomes. In this research, we establish competition affecting aggregate economic performance.
There exist differences in competitive pressures, which provide some rough indications of the possible gains in performance that arise from reform to intensify the product market competition. Some studies suggest the differences in regard to competitive pressures remain one of the important aspects in explaining the variation in economic performance across most countries. Furthermore, most of the economists believe that product market reforms that enhance competition create positive effects on employee performance.
In identifying the scope of intervention and monopoly, there are two extreme economic models expressed by economists in regard to market aspects Perfect competition and monopoly. In perfect competition consumers, welfare is optimized and it is not improved even upon an omniscient regulator.
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