Major Project

Rana Barakat

N01678989

BECN 150 - 0NL

 Table of Content

Basic Theme............................................................................................................................................3
Perfect Competition.........................................................................................................................3
Monopolistic Competition...............................................................................................................3
Oligopoly.......................................................................................................................................... 3
Monopoly..........................................................................................................................................4
Critical Review....................................................................................................................................... 5
USDA Takes Actions to Lower Food Prices and Promote Fair Competition (Perfect
Competition).....................................................................................................................................5
Cage-Free Egg Market Faces Supply Challenges Amid Rising Demand (Monopolistic
Competition).....................................................................................................................................6
USDA Report on Beef Market Concentration and Competition (Oligopoly)............................6
We Can No Longer Be Held Hostage by a Monopoly Utility (Monopoly)................................. 7
Terminology............................................................................................................................................ 9
Perfect Competition.........................................................................................................................9
Market Transparency.................................................................................................................9
Competitive Pricing....................................................................................................................9
Monopolistic Competition...............................................................................................................9
Product Differentiation.............................................................................................................. 9
Consumer Preference...............................................................................................................10
Oligopoly........................................................................................................................................ 10
Market Concentration..............................................................................................................10
Price Transparency.................................................................................................................. 10
Monopoly........................................................................................................................................10
Rate Regulation........................................................................................................................10
Monopoly Power.......................................................................................................................11
Consumer Protection................................................................................................................11
Underline...............................................................................................................................................12
USDA Takes Actions to Lower Food Prices and Promote Fair Competition (Perfect
Competition)...................................................................................................................................12
Positive Statements...................................................................................................................12
Normative Statements.............................................................................................................. 12
Cage-Free Egg Market Faces Supply Challenges Amid Rising Demand (Monopolistic
Competition)...................................................................................................................................12
Positive Statements...................................................................................................................12
Normative Statements.............................................................................................................. 13
USDA Report on Beef Market Concentration and Competition (Oligopoly)..........................13
Positive Statements...................................................................................................................13
Normative Statements.............................................................................................................. 13
We Can No Longer Be Held Hostage by a Monopoly Utility (Monopoly)............................... 13
Positive Statements...................................................................................................................13
Normative Statements.............................................................................................................. 14
References............................................................................................................................................. 15
 Basic Theme

Perfect Competition

Through greater transparency and a reduction in monopolistic tactics, the USDA has

implemented new rules to create a more equitable agriculture market. These policies help

small farmers and ranchers compete with larger businesses. Examples of these policies

include improved access to seed germplasm and more equitable pricing laws in the cattle

sector. These programs represent the ideals of perfect competition by leveling the playing

field, whereby fair pricing and expanded market access are intended to reduce consumer

prices while promoting a healthy agricultural ecology.

Monopolistic Competition

The Agricultural Marketing Service of the USDA draws attention to the persistent

scarcity of cage-free eggs, which is being caused by customer demand for goods supplied

ethically. A premium has been established around cage-free eggs as a result of this change in

consumer tastes, enabling farmers to charge more in a market where products are more

distinctive. Monopolistic competition is best shown by this arrangement, in which providers

react to particular customer preferences and have the power to affect pricing because of the

distinctive features of their goods.

Oligopoly

Concerns regarding market concentration—where a few powerful companies control

the majority of supply—are highlighted in the USDA's most recent study on the beef

business. Because of this oligopolistic structure, which restricts competition and makes it

difficult for smaller farmers to see prices, the USDA is proposing regulatory changes to

promote more equitable trading practices. These steps are intended to improve fairness in a
highly concentrated business by preventing anti-competitive behavior and guaranteeing

smaller manufacturers have greater access to markets.

Monopoly

State Representative Aundré Bumgardner of Connecticut discusses the exorbitant

electricity prices set by Eversource, a major utility that operates as a monopoly in some areas

of the state, in this opinion piece. The widespread Utilities Regulatory Authority (PURA)

authorized this hike, which resulted in an additional $920 million in rates. The substantial

impact on citizens who were already struggling with high living expenses caused widespread

outrage. Bumgardner calls for legislative changes to improve accountability and attacks

Eversource for putting shareholder profits ahead of customer interests. The paper stresses the

necessity for openness and consumer protection in monopolistic utilities and underlines

monopoly traits including absence of competition and regulatory scrutiny.

 Critical Review

USDA Takes Actions to Lower Food Prices and Promote Fair Competition (Perfect

Competition)

Small-scale farmers stand to gain directly from USDA's efforts to improve agricultural

transparency by fostering competition and equitable pricing. The USDA seeks to

counterbalance the monopolistic dominance that big businesses hold in these markets by

promoting more equal access to seed supplies and enforcing unfair conduct in the cattle

sector. This endeavor supports a decentralized system where supply and demand decide

pricing more, which is consistent with the ideals of perfect competition.​

When there is perfect competition, a large number of small producers influence market

prices, resulting in a balance that benefits customers. This goal is served by USDA's

initiatives to promote open pricing in the cattle and seed markets, which stop bigger

companies from controlling access and prices, which has historically hurt smaller rivals. By

enabling smaller companies to enter the market more fairly, transparency policies aim to

stabilize consumer prices by increasing supplier participation.

Since less monopolistic behaviors frequently result in cheaper pricing and improved

access to a wider range of items, consumers stand to benefit from these improvements.

Pricing is in line with competitive principles rather than corporate influence because of

USDA's dedication to fair market processes and regulation. These measures demonstrate how

equitable access to resources promotes a stable market in addition to strengthening it by

consumer-friendly pricing.
Cage-Free Egg Market Faces Supply Challenges Amid Rising Demand (Monopolistic

Competition)

Producers in this market niche can charge higher rates because of the growing demand

for cage-free eggs, using product distinctiveness as a competitive advantage. Businesses that

engage in monopolistic competition base their pricing not just on price but also on distinctive

features of their products. Here, buyers place a higher value on goods obtained ethically,

enabling manufacturers to use cage-free status as a differentiation and maintain higher prices.​

Because each company may target specific customer preferences, this difference creates

a market where direct rivalry is less fierce than in perfect competition. However, the market's

capacity to fulfill demand is constrained by supply issues brought on by a lack of cage-free

infrastructure, which keeps prices high and encourages more investment in production

facilities to stabilize supply.

By satisfying certain customer preferences, cage-free egg producers gain from less

price sensitivity as a market inside monopolistic competition. As manufacturers take

advantage of the ethical factors that customers value, this approach enables market

segmentation and brand loyalty. However, the ongoing supply constraint emphasizes the

necessity of more infrastructure to satisfy rising consumer demand.

USDA Report on Beef Market Concentration and Competition (Oligopoly)

The difficulties presented by an oligopolistic structure, in which a small number of

powerful companies control a significant portion of the market, are highlighted in the USDA

study on the beef industry. These companies have the ability to affect prices and limit

competition, which frequently disadvantages smaller businesses that have less negotiating

leverage. The proposed regulation changes from the USDA are intended to level the playing
field for smaller growers by preventing anti-competitive behavior and enhancing

transparency.​

Oligopolies sometimes limit competition by letting a small number of powerful

companies set market pricing. Because there is no price transparency in the beef market, big

businesses may control pricing and supply. Due to a lack of competitive pressure, this

approach makes it harder for smaller companies to compete fairly, which frequently results in

higher consumer costs.

In order to give smaller farmers more equitable access to market prices, the USDA is

working to address these power disparities through reforms. Since more competition

frequently results in more stable prices, this action is also essential for consumers. The USDA

hopes to promote a market that functions more in line with competitive principles by

opposing the oligopolistic control over the cattle industry.

We Can No Longer Be Held Hostage by a Monopoly Utility (Monopoly)

The difficulties customers have in monopoly markets are shown by the recent rate hike

implemented by Connecticut's monopoly utility, Eversource. Eversource may raise rates to

pay operating costs and pass those costs on to customers since there is no competition. With

regulatory scrutiny serving as the sole price check, this control highlights the monopoly's

dominance in critical services.​

Due to Eversource's monopoly pricing power, customers are forced to accept these rate

rises. Utilities can ask for rate changes under regulated monopolies, but there is less incentive

to lower operating expenses when there is no competition. Customers are heavily burdened

by this market power, especially when it comes to necessities like energy.

Legislative reform proposals seek to diversify the utility industry, which may enable

local governments to establish their own utilities and bring in competition. Customers may
have more options thanks to this modification, which would lessen their reliance on a single

supplier. Government control is necessary in a monopoly to safeguard the interests of

consumers, emphasizing the significance of openness and responsibility in setting prices.

 Terminology

Perfect Competition

Market Transparency

This phrase describes easily comprehensible information about trade procedures and

pricing that enables all parties to make well-informed choices. The goal of USDA's

agricultural transparency initiatives, including elucidating pricing policies in the beef sector,

is to foster greater competition so that farmers and smaller producers may engage in fair

competition free from monopolistic restrictions.

Competitive Pricing

When several small producers in a framework of perfect competition affect the price

according to supply and demand rather than a single entity controlling it, competitive pricing

arises. The USDA encourages more equitable pricing that isn't unduly impacted by a small

number of powerful agricultural companies by combating monopolistic behaviours.​

Monopolistic Competition

Product Differentiation

Businesses compete by distinguishing their items rather than only on price when there

is monopolistic competition. This is demonstrated by the market for cage-free eggs, where

manufacturers may charge more by promoting ethical sourcing as a characteristic of their

product. Within the larger egg industry, differentiation produces specialized markets where

cage-free eggs are marketed as a high-end option.​

Consumer Preference

By enabling producers to modify prices in response to the distinct value that customers

place on particular product features, consumer preferences fuel monopolistic competition.

When it comes to cage-free eggs, suppliers are able to set premium pricing since ethical

sourcing satisfies customer preferences.

Oligopoly

Market Concentration

This expression refers to a market in which a few companies control a significant

portion of the supply. A small number of powerful corporations can impede competition in

the U.S. beef market. This issue is addressed in the USDA study, which recommends

regulation changes to reduce the influence these powerful entities have oversupply access and

pricing.

Price Transparency

Price transparency is crucial in oligopolistic markets because it promotes more

equitable and competitive trade behaviors, as the USDA has suggested for the cattle sector.

By preventing powerful companies from manipulating pricing, more transparency seeks to

enable smaller manufacturers to compete on more equitable terms.

Monopoly

Rate Regulation

In monopolistic markets, government agencies frequently control prices to safeguard

customers, especially for necessities like utilities. Eversource's rate hike in Connecticut
serves as an example of how unbridled monopolistic power may result in increased prices for

consumers, underscoring the necessity of regulation to avoid overpricing.​

Monopoly Power

The exclusive control a business has over a market, which restricts customer choice and

permits pricing control, is known as monopoly power. This is best demonstrated by

Eversource's dominance over Connecticut's electric service, where customers have few, if

any, other options, giving Eversource considerable price power.​

Consumer Protection

Utility tariffs are regulated by organizations like PURA to protect customers from the

possible harm caused by monopolistic power. These organizations try to lessen the financial

burden that monopolistic pricing tactics place on customers by stepping in to stop

Eversource's rate increases.​

 Underline

USDA Takes Actions to Lower Food Prices and Promote Fair Competition (Perfect

Competition)

Positive Statements

1. "The USDA has announced new transparency initiatives aimed at leveling the playing

field for small farmers"​

2. "A focus on seed access and fair beef pricing could lower costs for both farmers and

consumers"​

Normative Statements

1. "Increasing transparency will create a fairer agricultural market and support

small-scale producers"​

2. "The USDA's efforts should help counteract the monopolistic tendencies of large

agricultural corporations"​

Cage-Free Egg Market Faces Supply Challenges Amid Rising Demand (Monopolistic

Competition)

Positive Statements

1. "Demand for cage-free eggs has surged, causing supply limitations"​

2. "Cage-free eggs are priced higher due to ethical sourcing requirements that appeal to

consumers"​
Normative Statements

1. "The rising demand for cage-free eggs shows that consumers are willing to pay a

premium for ethically sourced products"​

2. "Expanding cage-free infrastructure is necessary to meet consumer demand without

driving up prices further"​

USDA Report on Beef Market Concentration and Competition (Oligopoly)

Positive Statements

1. "The USDA identified significant concentration in the U.S. beef market, with a few

companies dominating supply"​

2. "Proposed regulatory changes aim to improve price transparency and protect smaller

beef producers"​

Normative Statements

1. "The USDA’s reforms should make the beef market fairer and more competitive for

all participants"​

2. "Greater transparency is essential to prevent price manipulation by large corporations

in the beef industry"​

We Can No Longer Be Held Hostage by a Monopoly Utility (Monopoly)

Positive Statements

1. "Eversource recently raised rates, impacting Connecticut residents"​

2. "The utility company operates as a monopoly with significant control over pricing in

the region"
Normative Statements

1. "Regulators should step in more aggressively to prevent excessive rate hikes from

monopolistic utilities"​

2. "Consumers deserve more control and transparency over essential utility pricing,

especially in monopolized markets"​

 References

USDA Press. (2024, October 8). USDA announces actions to lower food prices, bring

fairness to farmers, and promote more competitive food supply chains. USDA.

https://www.usda.gov/media/press-releases/2024/10/08/usda-announces-actions-lower-

food-prices-bring-fairness-farmers-and

USDA. (2024, October 25). Egg markets overview - October 25, 2024.

https://www.ams.usda.gov/mnreports/ams_3725.pdf

MacDonald, J. M., Dong, X., & Fuglie, K. (2023). Concentration and competition in

U.S. agribusiness (Report No. EIB-256). U.S. Department of Agriculture, Economic

Research Service. https://doi.org/10.32747/2023.8054022.ers

Aundré Bumgardner, A. (2024, August 12). We can no longer be held hostage by a

monopoly utility.

https://www.theday.com/op-ed/20240812/we-can-no-longer-be-held-hostage-by-a-mon

opoly-utility/