V. Answer the following questions:

1. What was a market originally? 2. What is a modern market? 3. What does competition influence? 4. What three things cause prices to fluctuate? 5. When is a market created? 6. What three means are mentioned by which buyers and sellers can communicate if they don’t meet in person? 7. What price operates in a perfect market? 8. What does the ruling price indicate?

Reading drills

1. Practise the pronunciation of the following words:

a) stress the first syllable:

perfect, numerous, planning, government, cornering, operate, company, postal, limited, practice, transport, circumstance, ownership, legal, merger;

b) stress the second syllable:

although, available, monopoly, monopolize, distinguish, variety, control, commodity, authority, permit, inventor, producer, arrangement, comparatively, distinct, complete, canal, obtain, illegal, restrict.

Text C

Although in a perfect market¹ competition is unrestricted and sellers are numerous, free competition² and large numbers of sellers are not always available in the real world. In some markets there may only be one seller or a very limited number of sellers. Such a situation is called a monopoly, and may arise from a variety of different causes. It is possible to distinguish in practice four kinds of monopoly.

State planning and central control of the economy often mean that a state government has the monopoly of important goods and services. Some countries have state monopolies in basic commodities like steel and transport, while other countries have monopolies in such comparatively unimportant commodities as matches. Most national authorities monopolize the postal services within their borders.

A different kind of monopoly arises when a country, through geographical and geological circumstances, has control over major natural resources or important services, as for example with Canadian nickel and the Egyptian ownership of the Suez Canal. Such monopolies can be called natural monopolies³.

They are very different from legal monopolies, where the law of a country permits certain producers, authors and inventors a full monopoly over the sale of their own products.

These three types of monopoly are distinct from the sole trading opportunities which take place because certain companies have obtained complete control over particular commodities. This action is often called «cornering the market»⁴ and is illegal in many countries. In the USA anti-trust laws operate to restrict such activities, while in Britain the Monopolies Commission examines all special arrangements and mergers⁵ which might lead to undesirable monopolies.

Comments

1. perfect market — досконалий (немонополістичний) ринок

2. free competition — вільна конкуренція

3. natural monopoly — природна монополія

4. cornering the market — спекулятивне контролювання ринку

5. merger — амер. об’єднання, злиття (підприємств тощо)

Vocabulary exercises

I. Find single words in the text for which the following words could

be substituted:

though, unlimited, many, restricted, appear, reasons, separate out, types, essential, as, relatively, non-essential goods, frontiers, condition, main, allows, manufacturers, selling, categories, differ, commercial, have got, full, unlawful, serve, to limit, studies, amalgamations, unwanted.