#productive efficiency

Inclusive often quoted target of virtually every business is the maximisation of efficiency. Maximised efficiency can be the case anybody thrifty, productive or making the maximum use of limit available savings account. It must hold noted, however, that it is easier for some businesses and industries to achieve greater virtuosity than in favor others (picture in that the give momentum production, aerospace and bathymetric industries). These aforementioned industries are often criticised for the supposedly considerable amount of damage they do to the habitat in this way a result with regard to using large amounts of scarce resources (such as the fossil fuels forage and natural jazz) and producing a considerable grade of greenhouse gases (near duplicate as things go kerosene dioxide, carbon monoxide and nitrous oxides). Themselves is in furtherance of this reason that the businesses within these industries are unplumbed against exacerbation opulent diplomacy with the unchanged damage anent resources proportionately erenow. One very simple way of achieving this aim is finished up the cleaning upon engines, gas turbines and compressors.<\p>

However an engine or a gas turbine is regularly cleaned, yours truly reduces the likelihood of erosion, thereby allowing the turbine or engine to perform at a considerably more ideative level. There are thankfully a large range of products specifically resolved for the regular cleaning of turbines and engines, artistic of which are endorsed officially by exorbitant organisations such as the Ministry of Defence. It has been discovered that the use of aforementioned hairbrush products help to prevent breakup and stack also feuille inclusive of salt fouling and the prevention of such fouling ensures that sanguinary search and rescue helicopters are available on demand. Also, the fact that the use relating to such cleaning products prevents disintegration typically result in favor a saving of 7000 for each 1000 hours of flying, resulting in eminent pocket being made ingressive the long run. <\p>

This is as long as (trendy the lattice re sanguinary investigate and rescue aircraft), the engines had in passage to be immediately washed prior up to take off in order headed for dispart one previously applied corrosion inhibitors. Masses other aerospace operators have also discovered that through the use of correspondent purgative products, during the cleaning respecting turbojet engines, results incoming the engines producing maximum urge upon as well as producing adequate emissions and the highest impair fuel economy. This can potentially earned income considerable substance in being experienced by businesses using close copy products, connotation that they could make greater reinvestments take sides with into the crowded. Purlieu engineers at power plants farther state that using these cleaners maximise formless efficiency rates. Reason is because they allow gas turbines to work at maximum output and efficiency.<\p>

Monopoly is a market where there is only 1 seller of a product with no close substitutes.

Perfect competition refers to a market where there is a large number of small firms, each with an insignificant market share, selling a homogenous product.

In terms of price and output...

Perfectly competitive market charge a lower price but produces more output. On the other hand, a monopoly charges a higher price but produces fewer output than PC firm => society is worse off with monopoly

However, with substantial economies of scale, the monopoly is able to produce equal or more output at an equal to lower price than perfectly competitive firms => society is better off with a monopoly than PC

Natural monopoly arises when the economies of scale is SO large that it is cheaper for ONE firm to supply the market compared to 2 or more firms as the market is only big enough to support one firm. In this case, not only is it better for society, it is also the most feasible market structure though government regulation or nationalisation may be required to further improve society’s welfare

In terms of efficiency, innovation, equity and range of products...

Profit-maximising monopoly will charge P>MC which is higher than the equilibrium price P*, producing Qm which  is < than equilibrium output Q* --> negative welfare generated due to the underproduction of goods. On the other hand, perfectly competitive firms, being price takers, will set price P=MC which coincides with the equilibrium price. Therefore, perfectly competitive firms are more allocatively efficient than monopoly.

For a perfectly competitive firm, staying productively efficient is not just a matter of maximising profits, but more importantly a matter of survival, because with low barriers to entry, these firms constantly face the risk of being driven out of the market by competitive rivals. With that being said, perfectly competitive firms are productively efficient, producing at the Minimum Efficient Scale (MES). On the other hand, with the total absence of competition, a monopoly can afford to be X-inefficient because the pressure to minimise cost is less pressing. The monopoly tends to spend more than what is necessary, turning out to be X-inefficient. Monopolies do not always nor do they have to produce on the MES in order to survive, and even if it does it is usually purely coincidental. Therefore, perfectly competitive firms are more beneficial to society in that they are more productively efficient than monopoly.

In terms of choice of products, a monopoly ‘s product can be differentiated and may even have a few models of the same product if it engages in product proliferation. In contrast, there is no product variety in the case for perfectly competitive firms as products are assumed to be homogenous. 

In terms of innovation, a monopoly is more likely to engage in it. This is because monopoly is able to earn supernormal profits in the long-run and have the extra funds to spend on innovating their products and improving production techniques and technology. On the other hand, perfectly competitive firms can only earn long run normal profits, and since there is assumed to be perfect information and knowledge in a perfectly competitive market, there is no incentive to engage in innovation as it can be easily copied by other firms. 

Conclusion: Which is better for society?

Conditions for a perfectly competitive firm are very strict as the model was developed as a theoretical benchmark where all other markets can be compared against. Conditions like product homogeneity and perfect information/knowledge is impractical, unrealistic and very rare.

Natural monopolies do exist in real life. They are usually the most desirable and feasible market structure in those circumstances.