Market Power (Coursework Sample)

Market Power Discussion.
Name:
Course:
Tutor:
College:
Date:
Employers with market power in a perfect competition model.
In perfect competition markets, the assumptions reflect a market that has many sellers and relatively many buyers. The firm is a price taker and meaning the firms are not in control of the market prices. These assumptions make the perfect competition market a fair trade field for both the employer and the buyer. However, when employers have the market power there is a shift in market wage activity. Most employers engage in price discrimination as well as wage discrimination. A good example of a case of employers with market power in a perfect competition model is the stock exchange markets. The stock exchange should be a model of perfect competition model but when the investment banks have sole influence on the market price it impacts negatively on the perfect competition model.
Employees with market power.
The case where employees posses market power makes the labour market liberal. There is a sudden urge by employees for employers to rationalize their wages in tandem with market trends. The employees have the power to bargain and even arm twist their employers in demanding their wage. The model where employees have market power means that there is an elevated demand for employees with specific skills that are in high demand in the labour market. An example of a scenario where employees have the market power is the soccer league where professional soccer players in the English Leagues make their wage demands to their employers. The model results in high wages for the employees.
Bilateral monopoly.
In a bilateral monopoly, the market power is not controlled by neither the employers nor the employees. The type of model occurs where there is a single producer of a good and only an individual supplier in the market. In such a mod...