Monopoly Essays (Examples)

The OFT may then refer the companies to the Competition Commission (formerly known as Monopolies and Mergers Commission).

The Competition Commission also plays a major role to investigate the situations which are called 'Oligopoly Situations' which involve explicit or implicit collusion between firms. Then the Competition Commission decides if the monopoly is acting against the public interest or not. And if they find a firm with a monopoly situation they recommend measures such as:-

Price cuts

Price and profit controls removal of entry barriers breaking up of the firm which is rarely a recommendation

If a monopoly situation exists, the workers and managers would take a great advantage by using less technique, knowledge and expertise in producing a good and would enhance their means of profits. Thus the good would not be much to the standards, as it would be in the perfect competition. This is known as X-inefficiency (rownless,…

Monopoly

Radical Treatise on Monopoly

When a firm is the only seller or supplier of a good or a service for which there is no close substitute, it is referred to as a monopoly. roadly speaking, every firm would naturally like to have a monopoly given that monopolies do not face competition. However, monopolists can only succeed in a market situation where the barriers to entry are very high (rue & McConnell, 2007; aumo & linder, 2008; Miller, 2011; Hubbard & O'rien, 2008). As was reported in Hubbard & O'rien (2008), there are four instances where the barriers to entry can be high enough to keep out competing firms:

The entry of more than one firm into a market is blocked by the government;

One firm has a natural monopoly due to the fact that the economies of scale are very large;

The key resources needed to produce a good…

The lack of incentives or competitive pressures may lead monopolistic firms to neglect minimizing unit costs of production, i.e., to tolerate "X-inefficiency" (phrase coined by H. Leibenstein). Included in X- inefficiency are wasteful expenditures such as maintenance of excess capacity, luxurious executive benefits, political lobbying seeking protection and favourable regulations, and litigation" (Khemani and Shapiro, 1993).

In all, monopoly is the economic state in which a single company produces a specified product or type of products, places it on the market at discretionary prices and faces no competition. The monopoly influences the management as it reduces its interest towards product development, satisfaction of customers' needs, the personnel and the resource allocation.

eferences

Falkner, ., 1997, Biography of Smith, Liberal Democrat History Group, http://www.liberalhistory.org.uk/item_single.php?item_id=37&item=biographyetrieved on February 13, 2008

Henderson, D.., 1999-2002, Biography of Adam Smith (1723-90), the Library of Economics and Liberty, http://www.econlib.org/library/Enc/bios/Smith.html. etrieved on February 13, 2008

Karier, T.M., 1993,…

A few years ago there were congressional hearings about the accusation against the larger airlines actively working to shut out any smaller newcomer to certain hubs around the world.

hile the ability and willingness of incumbent airlines to respond to competitive entry is central to competition, at some point that response may cross the line of fair competition and become an unfairly exclusionary practice intended to drive the entrant from the market. hen that happens, the result is insufficient competition to discipline the incumbent with resulting higher fares and possibly lower service compared with a situation where the entry had been successful (Clinton, 1998)."

In this situation congress agreed that the larger airlines were purposely driving the smaller ones out of hubs by price gouging and they were ordered to stop.

CONCLUSION

The airline industry is an extremely fickle market. One day prices may be through the roof, while the…

Therefore, the change seen within the market structure Microsoft devotion high quality alive and strong.

Still, there has been a decline of transactional costs in light of a broken up Microsoft. Before the change of business pattern, Microsoft held the monopoly and therefore capitalized on profit margins. Here the research shows that "Microsoft enjoys so much power in the market for Intel compatible PC operating systems that if it wished to exercise his powers solely in terms of price, it could charge a price for Windows substantially above that which could be charged in a competitive market" (Wilcox 1999). However, this trend is not last significantly after Microsoft was supposed to break up due to its violation of antitrust laws. Yet Microsoft never was forced to fully break up, although it significantly had to reduce practices that were associated with its monopolistic position before the judgment. Moreover, Microsoft's stock fell…

Monopoly Market

Characteristics of Perfectly Competitive Industry

A perfectly competitive market is characterized as the market in which the firms as well as the consumers are the price takers. A price taking producer implies to the producer whose actions and decisions are not affected by the market forces but are only affected by the choice of the consumers. Similarly a price taking consumer refers to the consumers whose preferences are not homogenous and they have multiple choices. In short a perfectly competitive industry is a set of price taking producers. Other characteristics of the perfectly competitive industry includes

The perfectly competitive industry comprises of large numbers of buyers and producers, and an existence of large number of small firms.

The homogeneity of the product

The firms produce products that result to be the perfect substitutes of products produces by other firms

The producers and the firms of small and large…

To this end the argument that monopolies are bad to consumers carries a lot of truth and fact with it and will only be fair to look at such an argument with due considerations.

eferences

Baker, M.J. (1985). Marketing strategy and management. Macmillan: New York.

Belk, .W. (1975). "Structural variables and consumer behavior." Journal of Consumer

esearch 2: 157-164.

Besanko, D. et al. (1996). Economics of strategy. John Wiley and Sons: New York.

Day, G. et al. (1979). "Consumer-oriented approaches to identifying product-markets." Journal

of Marketing 43:8-19.

Dick, a.S. & Basu, K. (1994). "Customer loyalty: Toward an integrated conceptual framework."

Journal of the Academy of Marketing Science 22 (2): 99-113.

Fraser, C. & Bradford, J. (1983). "Competitive market structure analysis: Principal partitioning of revealed substitutability." Journal of Consumer esearch 10: 15-30.

Gabszewicz, J. et al. (2000). "Price competition with complementary goods." Economics Letters, forthcoming.

Kirzner, I. (1973). Competition and entrepreneurship.…

One immediate ramification could be that the government intervenes in the market to limit Microsoft's monopolistic power. This has occurred frequently and Microsoft is constantly engaged in court proceedings to verify that it is not abusing its market position.

Another limiting factor would be that if Microsoft charged too much for its products then this would open the door for another company to enter the market or gain market share. For example, if Microsoft's OS's became too expensive then this would open a greater door for smaller competitors such as Linux. For most consumers, Microsoft's price does not exceed their switching costs for moving to a different platform. However, if Microsoft increases its prices substantially then this situation could be different.

The situation that Microsoft is in regarding its market structure is common for companies that are monopolistic. These companies can often charge a significant price premium for their goods…

These two variables are sufficiently large as to prevent any form of price equalization.

Stiglitz (1977) noted that the conventional theory of monopoly has in a way been restrictive in an unnecessary manner in regard to two main aspects. The first aspect is that the monopolists will generally tend to charge their clients amounts that are proportional to the quantity that they consume (This is referred to by Stiglitz (1977) as the liner price schedule).Such a policy is noted by Stiglitz (1977) to never lead to profit maximization. The non-liner price schedules are noted to be desirable when feasible. Monopolists are however noted to introduce various forms of inefficiencies due to factors such as secondary resale markets or sue to the fact that individuals differ. These are noted as the discriminating aspects of monopolists in the insurance sector. The second aspects of the conventional theory of monopoly in regard to…

MONOPOLY

Microeconomics: Monopoly

The structure of the markets in which companies operate may vary. The implications of these variations are vital for an understanding of the environment or setting in which a business operates. A monopoly is a market structure where production is under the control of a single supplier. Since the monopolist is the sole source of supply in a market, the demand curve is also the industry demand curve. This implies that the monopolist faces a downward sloping demand implying that if the monopolist wants to sell more, it must reduce the price. In essence, a monopoly is signified by the lack of competition, which usually results in high prices and inferior product quality (Mankiw, 2011).

There are four distinctive causes of monopoly power. These include legal barriers, product differentiation barriers, economies of scale barriers, and transport cost and tariff barriers. Monopoly is the extreme instance in capitalism.…

The deal was immediately criticized as anti-competitive by William Kennard, the chairman of the Federal Communications Commission, and by the Communications Workers of America, which represents some workers at both of the merged companies. But neither government regulators nor union bureaucrats will have the slightest impact on the latest merger. They have neither the power nor the desire to oppose the plans of the giant telecommunications monopolies. More substantial opposition to the merger exists among the overseas rivals of the huge American firms. Deutsche Telekom and France Telecom, the semi-privatized telecommunications companies of Germany and France, each owned 10% shares of Sprint, and Deutsche Telekom at one point sought to enter the bidding to acquire the entire company. Now both European firms will sell their holdings because MCI WorldCom is in competition with them in the European market. It is the second time that WorldCom chief Ebbers has spiked an…

Natural Monopoly

Generally, a monopoly is taken to be a situation whereby a given entity controls or owns the whole market or a significant portion of the same for a specified good or service. Essentially, there are several types of monopolies. In this text, I concern myself with natural monopolies.

A natural monopoly in the opinion of Baumol and Blinder (2007) "is an industry in which advantages of large-scale production make it possible for a single firm to produce the entire output of the market at a lower average cost than a number of firms, each producing a smaller quantity." Basically, what brings about a natural monopoly are the significant start-up as well as fixed costs associated with running a given type of business in a specific market. A good example of a natural monopoly in this case is a utility company operating in the utilities industry. For instance, when…

In many ways, Microsoft's point that it was a natural monopoly because of its browser and operating system being the most efficient and cost-effective solution for the market is well taken. Because of the demand for their system, there was a huge economy of scale, making PCs far less expensive. In addition, many monopolies are deadweight loss to society by taking more than giving -- Microsoft's investment and research/development continue to benefit society, and have, in fact, lowered the demand curve so that more people can afford personal computers. This has advanced the market by allowing the platform to become smaller and more efficient in the use of Smartphones and Tablets (Tutor2U, 2012; McKenzie & Shughart, 1998).

Monopolies are not always bad for society, it depends on the product. For instance, if the cost of production drops as the amount of production increases there is a benefit to the economy…

MSFT Monopoly

The Microsoft antitrust case was based around three premises -- that Microsoft monopolized the market for operating systems, that it monopolized the market for browsers and that it bundled its browser and operating system in order to use its market power in operating systems to control the market for browsers. The company was also accused of having illegal agreements with channel partners to keep Netscape's browser out of the market (Economides, 2001).

I believe that Microsoft was trying to gain monopoly power in the industry. However, under the Sherman Act, firms are only forbidden from gaining monopoly power by "improper means." In the case of operating systems, Microsoft was able to succeed on the strength of its product. The browser issue is more complex, and it appears that the practice of bundling Internet Explorer discouraged consumers from buying Netscape Navigator. Although the wording of the Sherman Act is…

Going to jail takes you out of the economic system. In the real world, this is usually to one's financial detriment, but not necessarily so in the game.

Comparing the game and real world versions of the monopoly concept, they are similar. In the real world, a monopoly can occur when an owner has exclusive rights over a resource. The color blocks are not considered monopolized until one person owns all of them. Before that point, the properties are considered to be subject to competition. In the game, competition is simplified significantly. Prices are simply stated -- players have no ability to control prices nor do they have the ability to attract demand. Demand is simply apportioned by the dice.

Nevertheless, once a customer has a monopoly, they can begin to extract premium rents. This is possible in the game only by virtue of the fact that some form of…

Media and Monopoly

In 1983, fifty corporations controlled the vast majority of all news media in the United States. According to the book The Media Monopoly written by en agdikian and published in 1992, "in the U.S., fewer than two dozen of these companies own and operate ninety percent of the mass media" -- controlling almost all of America's newspapers, magazines, television and radio stations, books, records, movies, videos, wire services and photo agencies. When a new edition of The Media Monopoly was published in 2000, the number had fallen to six. Since 2000, there have been more mergers and Internet media has increased in importance. ut, the Internet hasn't made the problem go away. In fact, more than one in five of all Internet users in the United Sates log in through America Online, a service of AOL Time-Warner, the world's largest media corporation.

Monopolization of the media has…

Illegal Restraints of Trade: Legal Monopolies in the United StatesSeveral federal laws prohibit the formation and operation of monopolies in the United States at present. The laws against monopolies are intended to prevent these types of business entities from dominating a given market by eliminating all competition, typically to the detriment of consumers. Moreover, monopolies are also characterized by lower-quality products and services and they tend to discourage innovation in ways that are also detrimental to consumers. Against this backdrop, it is reasonable to question why some legal monopolies are still allowed to exist in the United States today. To help answer this question, the purpose of this paper is to provide a review of the relevant literature concerning legal monopolies in the United States today, including the controlling federal legislation as well as their advantages and disadvantages. Finally, the paper presents a summary of the research and important findings…

Building Community with Wal-Mart
Wal-Mart’s impact on a community’s economic health is unambiguous. It offers a fair amount of benefits to communities that are destitute. Most of these boons are purely in terms of its pricing models. Specifically, Wal-Mart is able to consistently deliver the lowest prices around for its goods. Moreover, it offers a diversity of items that make it ideal for one-stop shopping in impoverished communities. Thus, those who are financially strapped in these neighborhoods are able to pay low prices for virtually everything they need. In this regard, the extent of the supplies which Wal-Mart carries is notable. According to Fitzgerald and Wirtz (2008), the company has been able to provide exceedingly low prices on pharmaceuticals, including its “$4 pharmacy program” which is of immense benefit to those living in penury. Oftentimes, such people are denied access to quality pharmaceuticals because of their low incomes. Wal-Mart is…

Both of these moves broke the monopoly. The Canadian government broke Bayer's monopoly and the second company moved into the market, creating a temporary oligopoly. The influx of Cipro from Mexico represented a substitute product, thereby breaking Cipro's American monopoly. This lowered the price of the drug until demand subsided -- note that it was demand that subsided and not supply. This despite the fact that the monopoly-granting patent protection was affirmed in U.S. courts (Bayer, 2002).

Eventually, the market for Cipro returned to equilibrium once the crises was over. By seeing how the market changed when introduced to different stimuli, we can better understand the characteristics of this market.

The market for Cipro -- and in general all patent-protected medicines -- began as a monopoly in equilibrium. Bayer enjoyed substantial pricing power and demand stayed at or near the demand floor as a result. hen demand began to price,…

Instead, IM began to falter after a series of product failures. As a result, many companies gained market share against IM with some even over taking it; an efficient market took care of the issue.

Yet, another example of why government should not interfere with market structures is the airline industry. After 1978, the airline industry was quickly transformed into an oligopoly market structure where only a half dozen or so companies controlled 90% of U.S. travel. Airlines such as American mostly enjoyed high profits until 2000, taking advantage of limited competition and their ability to price discriminate to increase profit margins for those customers who were willing and able to pay higher prices. eginning in 2000, everything came crashing down for the airlines (pardon the pun). American airlines lost money from 2000 until it finally reaped a small net profit in 2005. The oligopoly market structure that once fueled…

The composite raw materials of dry cell batteries and the ingredients in vitamins are equally available to any entity wishing to enter those markets. Moreover, there is little to distinguish the products of different manufacturers in those areas besides packaging and branding because the products themselves are essentially identical.

Many consumer services such as hair dressing and auto repairs also represent perfect competition scenarios because the barriers to entering the market are not very high and once in business, the prices commanded by individual proprietors are substantially dictated by prevailing market prices and the traditional dynamic of supply and demand.

Applying Saint Leo University Core Values to Economic Markets

In principle, the core values of Saint Leo University (and of Christianity, more generally) require us to be morally and socially responsible members of the human community. Furthermore, those core values also require us to serve our communities, to contribute to…

Labor and Monopoly Capital

HAY BAVEMAN's book Labor and Monopoly Capital carries the tradition of Marxist schools. The author focuses on the labor process under the Fordism, arguing that how the work, under the discipline of scientific management, becomes disjointed, dull, and repetitive. According to him, the work is degraded. Like Marx, Braverman is a deterministic and looks into the question of how technological change in Fordism affected the attributes of work and the discrimination of working class.

The labor process under capitalism is one of the central themes of Braverman. Its main emphasis lies in providing a voice to the working-class movement. Taking his insights from Marx, Braverman is considered the latest follower that has accurately appreciated the profundity of Marx's work. Supporting his work from Marx himself, and drawing on his own experience as a trained craftsman, a socialist militant and journalist, and a manager of two publishing…

al-Mart is a price maker, as any monopoly would be. The company is famous for dictating prices to its suppliers. However, with regards to buyers, al-Mart is not a price maker. It is reasonable to assume that the company can raise some prices somewhat without losing market share; it is not true that they can raise all prices near indefinitely without losing market share. al-Mart has a captive audience, so they could raise their prices without significantly compromising their business, but other competitors would be able to exploit those increases and customers would be able to take their business elsewhere.

The demand curve for a true monopoly is negatively sloped, as is al-Marts, but al-Mart would lose all of its customers if it raised its price high enough, whereas a true monopoly would not. Indeed, a true monopoly seeks to maximize profit by finding the position on the demand curve…

Capitalism and Competition
It is ironic that the FTC video points to the shopping mall as evidence that its anti-trust laws are working, because the mall is going the way of the dinosaur—i.e., many malls are empty, as Amazon has basically killed the bricks and mortar retailers. With Amazon, the e-commerce giant, seeming to take over everything (or at least retail), it does seem at times like there is not much competition in some respects. What I find to be problematic is that Amazon can actually lose money on its retail end (it makes its money mainly through Amazon Web Services—i.e., by providing Internet to companies). With every transaction, Amazon is losing money—but because it is undercutting its competitors, its competitors are going out of business and Amazon gets their market share. As Amazon spreads into other sectors it does seem like it is becoming a trust—but it is still…

Monopoly of Opportunity

The concept of capitalism is often associated with concepts of free competition and opportunity and equal opportunity, where there is the ability of any firm to compete, and those with an entrepreneurial spirit may rise to the top of business and/or politics. In a recent article published by The Atlantic, Liu argues that the rather than providing opportunities equally, the system of capitalism seen in the U.S. constrains and exacerbates the existing economic, and therefore, social strata. The basic argument is that the rich are getting richer while the poor are getting poorer, effectivity creating an opportunity monopoly (Liu 1). The issue is not only associated with economic power but the way this is then impacting on and providing social power, including political power, as well as commercial power (Liu 1). By examining this article, and the underlying arguments, it is possible to appreciate the way in…

Monopolies and Trusts:

Appropriate Areas for Government Intervention?

Capitalism is the economic system that has dominated the United States virtually since the day of its independence. A social and economic system based on the recognition of individual rights; capitalism demands that owners' rights to control, enjoy, and dispose of their own property must be respected. In a capitalist system, the purpose of government is to protect individual economic rights, and to make sure that no one individual, or group may employ physical or coercive force upon any other group or individual. The success of capitalism is well evident. The surpluses that this system produces have enabled individuals to experiment; to create new products, and market new ideas. These private surpluses are traded in a free market in direct competition with other buyers and sellers. Such competition is best represented by the efforts of two or more parties acting independently to…

Although one cannot make a good case for asserting that any one component in and of itself constitutes a monopolistic practice (see, for example how the operating system's prices have remained low in the following graphs), as part of a greater plan to dominate the market, there certainly is a solid case. Although the penalty for Microsoft as a monopoly is hardly extreme, it will certainly serve as a model to both avoid, and watch out for in the future.

Table retrieved at http://www.gsm.uci.edu/~mckenzie/mantra.pdf

End Notes

Bill Gates, the Economist, 6/13/98

Ralph Nader and James Love, Computerorld, 11/9/98

http://www.brainyencyclopedia.com/encyclopedia/m/mi/microsoft_antitrust_case.html

Economics Resource Center. "Policy Debate. Is Microsoft a Monopoly? http://www.swlearning.com/economics/policy_debates/microsoft.html

http://www.utdallas.edu/~liebowit/book/msmonopoly.html

Economics Resource Center. "Policy Debate. Is Microsoft a Monopoly? http://www.swlearning.com/economics/policy_debates/microsoft.html

McKenzie, Richard. "Microsoft: The Monopoly Mantra." http://www.gsm.uci.edu/~mckenzie/mantra.pdf

http://www.brainyencyclopedia.com/encyclopedia/m/mi/microsoft.html#the%20monopoly%20question zdnet. "Microsoft to Reveal indows Code. http://news.zdnet.com/2100-3513_22-948381.html

orks Cited

Branyencyclopedia.com. "Microsoft Anti-trust Case." 2004. eb site. Retrieved on September 30, 2004 http://www.brainyencyclopedia.com/encyclopedia/m/mi/microsoft_antitrust_case.html…

Government Sanctioned Monopoly: The Electric Company: for the Public's Good or Ill?

The defined concept of a monopoly causes many students of economics to assume that any company that engages in monopolistic practices is automatically illegal, according to the Sherman Anti-Trust Act of the United States. A monopoly simply stated is an economic entity that completely dominates one facet of industry or one service industry. It alone sets the price of the good or service it is selling, because it has no competition, in contrast to the perfect competition of a competitive marketplace or even the limited competition of an oligopolistic marketplace. But occasionally the United States government allows certain organizations to behave as corporate monopolies for the public good, such as electrical power.

The reason electrical power companies are one a such a market situation where monopolies are allowed, in fact encouraged (as these utility monopolies are not generated…

Potato Chip Industry

Given that the new company is now run as a monopoly, how will this benefit the stakeholders involved, such as the government, businesses, and consumers?

The conventional economic case in opposition to a monopoly is that, since the cost structure is the same, a monopolistic business will manufacture goods at a decreased output in order to charge higher prices. The opposite is true in the case of a competitive industry. In a monopolistic market, not only do consumers suffer but also governmental efficiency is questioned (as a result of lower spending and tax rates) (Krugman and Obstfeld, 2008).

Another view of Monopolistic markets is that, manufacturers mostly take advantage of the economies as they produce and supply products and services on large scales which results in the fall of average total cost of the production. However, this fall in average cost ultimately increases the monopoly profits. Consumers…

market structures and the pricing strategies which are specifically related to each of them. The introductory section of the paper gives an overview of the four major types of market structures and explains the main features which draw distinguishing lines between them. These major types of market structures are perfect competition, monopolistic competition, monopoly, and oligopoly. The second section discusses the pricing strategies which are used by competitors in each of these market structures in order to compete with the other competitors or operate in a profitable and competitive fashion. A case study has also been included which gives a real life example of the market structure and pricing strategies of a specific company. The paper concludes by giving summary and key findings from the whole discussion.

Introduction to Market Structures

Market structure refers to the number of competitors operating in a particular industry and the level or intensity of…

Google Monopoly

Technology and the internet have brought about many changes in nearly all facets of modern living. As a result, markets and financial systems also have felt the impacts of this massive revolution. Monopolistic trends have been witnessed in the past decade as those organizations who can capitalize on a market, or by creating a brand new market, dominate with product innovation and keen business practices

The purpose of this essays is to exaine Google as company who is exisiting and flourishing in a monopoly market. The serach engine market has produced billions of dollars of revenue for this internet company. This essay will describe the major factors that affect the degree of the competitiveness in this market that Google is currently dominating. The essay will also examine the competitive forces that are trying to vie for business share and competitive advantage in this particular market.

Signs of a…

play board games today recognize that their development over the history of their existence was, to a great extent, reflective of the society that created and perpetuated them. In other words, a financial-type game created during the depression era would focus on a different general social mindset than one created during the much more financially secure era of the 1980s and 1990s or the digitally conscious world after 2000. The game that started its existence as Life is no exception to this phenomenon.

Created by Milton Bradley in 1860, the game started its existence under the name The Checkered Game of Life. In keeping with the general social view of the time, the game contained a strong moral aspect. The players moved across the board, navigating a number of virtues and vices, with rewards for virtues and penalties for vices. The game was immediately popular at the time, and Bradley…

Market Model Patterns of Change

Market Model Pattern of Change

The market model industry I research on is the rental movie industry, which the Blockbuster video was the dominant product. This industry has undergone through gigantic market change over many years. Hollywood video is the national competitor; however, they often compete with the local and regional movie rental industries. The use of the new technology has significantly led to the competition among different companies. The market model pattern of change shows that the industry has competitors or not, also, the costs in the company.

Explain the industry and outline the overall wave of change of the specific market structure

The Blockbuster video once dominated the movie rental industry; this has changed enormously due to the competition in the entertainment market. The evolution of the new technology has led to multiple competitions and has changed the consumers' purchase of the rental…

2007, potato chip industry Northwest competitively structured long-run competitive equilibrium; firms earning a normal rate return competing a monopolistically competitive market structure.

Potato industry

The situation

The competitive business environment of today forces economic agents across the globe to develop and implement a wide array of strategies by which to respond to the challenges of the various stakeholder categories, such as competitors, business partners, employees, customers, the governmental and non-governmental institutions and so on. One particular means by which the companies address these new challenges is that of uniting their forces in order to combine their resources, market shares and capitals and as such become more profitable. Particularly, the economic agents engage in mergers and acquisitions as a means of consolidating leading positions within the market places.

Such a situation was observed within the potato chip industry in Northwest. Up until 2007, the industry was characterized by the presence of…

Gaming, particularly as a form of entertainment has evolved throughout time. Over the past centuries gaming has taken many shapes and forms. Usually, the more popular games of the past required strategy and opponent anticipation. As society now moves towards the information age, many games have migrated to a digital format. The migration of gaming from physical games to that of a digital format is not without its strengths and weaknesses. As will be discussed in detail throughout the document, digital gaming offers much strength in relation to its physical counterpart. For one, digital gaming is faster, more convenient, and offers seamless access. However, in some instances it can be impersonal particularly over long distances. Physical gaming, is more personal, teaches proper sportsmanship, and develops closer relationship. Depending on the individual's desired outcome, particular gaming formats offering varying benefits to the consumer. Monopoly in both its physical and digital form…

Of course, this is a good thing for customers on short-term, but is negatively affects other companies on the market. This is because smaller competitors and especially those that intend to enter the market addressed by IBM find it at least difficult to provide product prices in accordance with those provided by IBM. These smaller companies do not have the ability of reducing their production or operating costs, which does not allow them to introduce competitive prices on the market. This way, they are clearly disfavored by IBM's position and market power.

In addition to this, in a field like it, it is imperative to make continuous investments into the research and development activity. This requires significant capital amounts from these companies. The investment levels that IBM reaches cannot be reached by many of these companies. This makes it difficult for these companies to keep up with IBM and its…

Wonks

It is the opinion of this author that equilibrium and efficiency are the ideal aim of corporations in the marketplace because it provides them with opportunity to maximize their profits over the long-term. While it may not necessarily provide for higher than normal profits at all times. While it does for the companies in the competitive marketplace to stay in the game. Having the ability to decide price and preempt market spikes and dips distinguishes nearly perfect competitive markets from monopolistic and monopoly types. In a perfectly competitive and efficient market, prices, choice, quality and customer service is driven by the consumer. This will mean that each item produced by the firm will exhibit prices that are determined by the market which. This will in turn tell the company how much product needs to be produced in order to facilitate equilibrium in the marketplace. Just as most students in…

Demand is dependent on the frequency of a condition in the population. This number, for most conditions, is generally known. Thus, the equilibrium point can be determined that would deliver the cost recovery and markup pharma companies seek, without allowing costs to escalate to gouging levels. The problem is that once the monopoly has been granted there are no serious cost controls beyond market controls.

There are two problems with this. The first is that without cost controls, it is difficult to improve bargaining power. First, buyers have little bargaining power because most buyers -- even insurance companies -- lack size to bargain over prices. Only Medicare and Medicaid have the size to drive prices down, because pharma companies are dependent on their money even with the monopoly. The second is that there is information asymmetry, which reduces the bargaining power of buyers. Again, only the largest and most sophisticated…

Antitrust Practices and Market Power

The modern business environment is increasingly characterized by the proliferation of emerging monopolies in various industries. One of the industries that have experienced an increase in budding monopolies is Information Technology, particularly with the growth and development of social media and networks. Technology companies have rapidly developed into monopolies because of the connection between attractive business opportunities. The growth of leading technology companies into monopolies has also been fueled by their efforts to gain and maintain market power. However, some of these companies such as Google, AT&T, Standard Oil, Microsoft, and Facebook have been investigated for antitrust behavior.

Similar to Google, Facebook is company whose growth and development is partly attributed to the failure by Microsoft to strangle it like it did to Netscape a decade before. Facebook's business and operations are entirely built on focusing on developing network effects since the firm's value for…

Online AntiTrust Issues

Antitrust law is a United States legal code that helps to maintain market competition by regulating anti-competition actions by organizations. The Sherman Act of 1890 was one of the first attempts to restrict large companies who fixed price, output and then manipulated demand to maximize their products. Standard Oil was one of the prime early examples of a company that controlled markets to the point that the government felt was detrimental to the entry of other competitors (Bork, 1993). In our current example, companies like Facebook and Google are being investigated, similar to Microsoft and AT&T, for controlling the Internet search process and/or network effects. This does not stop with Facebook and Google, but moves into many of the giant e-tailers (Amazon, EBay, etc.) that often use predatory or collusive practices to force customers into either advertising on their site, pricing to their scale, or in the…

Antitrust Practices and Market Power: Google Antitrust Behavior

Economic theory expresses that competition contributes substantially to the efficient operations of markets, and hence to the improvement of a nation's wealth status. Antitrust laws seek to foster competition in the marketplace and to consequently ensure that the welfare of consumers is maximized through the provision of low-priced high-quality products. This the laws do by preventing the emergence of cartels and monopolies, which impede on competition by creating barriers to entry, with the help of which they are able to obtain market power and consequently drive market prices to favor them. Although monopolies may result from either government action or natural reasons, in which case they are referred to as government and natural monopolies respectively, most monopolies are formed through exclusivity contract arrangements, mergers, acquisitions, and collusion. Antitrust laws work at limiting these.

The Costs of Antitrust Behavior

A number of companies…

Five forces' analysis (Porter 1980)

Five Forces Analysis of Competitive Structure

Michael Porters Five Forces Analysis of Competitive Structure is a paradigm for competitive position, which states that overall a company's profitability may be determined as a measure of the industry it is competing in and its strategic position within that industry (Strategy4u, 2004). According to the model some industries by nature will have a higher profit potential than others, primarily because they have a stronger competitive position and are placed within a more profitable industry.

Porter's Model also suggests that profitability is assessed via several factors, including the following: buyers/customers power, supplier's power, and rivalry among competitors, threat of new entrants into the market, and the threat of substitute products (Strategy4u, 2004). The company or industry will have a greater profit potential the less influential each of these items are. For example, if a company sells a product for…

Market Model Patterns of Change

Sir/Madam, answers attachment page. But write a APA format, citing quotations a APA format. answers fits 3 pages.

The operating system software industry that was dominated by Microsoft was a monopoly till quite some years back when other players came into the market and disrupted the monopoly. These players include Linux with their various operating system software such as edhat and Ubuntu and Apple with their Macintosh operating system.

The general pattern of change in this particular market model was that of monopoly to oligopoly. There are several short-run and long-run behaviors in the monopoly and oligopoly market models. In monopoly, there is only one market player who has full control over the market. However, in oligopoly, there are several market players who hold different market shares depending on their marketing strategies, brand awareness, product specification, product diversification, etc. Soberman & Gatignon, 2005()

The short-run…

It is too early to gauge the results of this initiative, although early results of 1 million downloads in two weeks are positive (Kharif, 2009).

Another competitor is Internet radio. This industry is fragmented, with hundreds if not thousands of operators. It has many of the same content advantages of satellite radio, including the ability to offer a wide range of formats. It is at a content disadvantage, however, because few if any Internet radio stations can afford the high-end talent that satellite radio has established. However, their cost structures are much lower as well, meaning that they can offer their product for free. As of 2006, an estimated 30 million Americans listened to Internet radio each week (Prince, 2006). The industry is at a disadvantage, however, in terms of its ability to measure its listenership. This in turn makes it difficult for Internet radio providers to compete for advertising…

Industrial/Economic egulations

According to the Organization for Economic Cooperation and Development (OECD) defines economic regulations (industrial regulations) as "intervening directly in market decisions such as pricing, competition, market entry, or exit ("Economic regulations," 2002). The main reason for economic regulation is because it is permits the straightforward businessman to succeed in the economy and decrease business relations within the economy from being broken by the illegal activity that takes place (Black, 2010). However, within the economy the market has four different structures that industries are classified under that the government uses to help control the advantages and limitations of supply and demand. The goal of the four structures is to look at how it "affects the outcomes in the market with impacts on the motivations, opportunities, and decisions of economic buyers and sellers through their behaviors within market competition" states Fischer (n.d.). The OECD defines social regulations as an impact…

Economics usiness' (Micro Economics) required write assignment response question: Compare contrast ' forces' analysis competitive structure S-C-P (Structure Conduct Performance) models perfect competition, monopoly oligopoly.

Five Forces vs. SCP model

The SCP model of market development suggests that there are three basic market structures which exist, that of perfect competition, monopoly and oligopoly. In a model of perfect competition, consumers are extremely powerful. "Perfect competition is characterized by many buyers and sellers, many products that are similar in nature and, as a result, many substitutes. Perfect competition means there are few, if any, barriers to entry for new companies, and prices are determined by supply and demand" (Monopolies, oligopolies, and perfect competition, 2012, Investopedia). It is very easy for new firms to enter the marketplace, and very easy for consumers to shift their purchasing power to other entities that offer them a better deal. There is little advantage to operating…

market structures in detail and analyses the pricing strategies that the firms have to undertake when they operate in different regimes. The case study on Toyota is considered next, which indicates that firms competing in various structures does not only have to focus on price and quantity ceteris paribus, they also have to consider external and internal variables that have a bearing on these decisions.

Introduction to Market Structures

Market structures are important parts of economic theory as they model market behavior that can help economists explain activities in industry with ease. Market structures, hence are basically models that define market behavior with respect to certain criteria so that it becomes simpler to compare events in real life to the postulated scenario as described in theory in order to be able to determine casualties and to define optimal strategies that firms operating in different market structures can use.

There are…

Development of the infrastructure is slow, as politicians have difficulty making decisions and moving forward efficiently. ired broadband is at the heart of the plan, yet most of the world is already moving towards a largely wireless platform for broadband, and consumer technology is supporting this (smartphones, tablet computers). NBN Co. is proposing itself as a wholesaler. However, the current proposal would put NBN in a monopoly position. Monopolies have little incentive to make investments in innovation, and have excessive pricing power. Government would need to ensure that pricing was not abusive, creating inefficiency. ithout government intervention in the wholesale market, NBN would be able to charge monopoly rents for its broadband, to the detriment of service providers and consumers -- everybody would pay more for broadband than they would if they were in a competitive market. In addition, if having a modern telecommunications infrastructure is the social goal of…

Maximizing Profits

In the present day and age, several market structures are existent in the global economy. Each and every market structure is distinct in its way of being run and the power that it has over market prices, trend setting and demand. The key element that helps in distinguishing between different market structures is mainly the amount of competition present between several producers of a single type of product. In this paper, the characteristics and means of maximizing profits alongside the barriers to enter the market will be seen and the role of each structure in an economy will be explained.

Markets in which there is a high amount of competition (mostly referred to as competitive markets) are such that no single producer or consumer has the ability to alone influence the price of products in them. This means that if a producer tries to exploit consumers by raising…

Antitrust Case

Economic general

Antitrust practices and market power: Microsoft

One of the most famous and prolonged cases involving antitrust allegations was that of the suit brought about by the Department of Justice against the Microsoft Corporation. It was alleged that Microsoft's act of 'bundling' specific applications such as its web browser, Internet Explorer and Windows Media Player to make them the default setting of its Windows operating system resulted in anticompetitive practices within the software industry. The European Union also waged an antitrust case against Microsoft, and its findings against the company were even more broad and sweeping than in the United States. As a result, in the EU, Microsoft "was not allowed to offer any technological, commercial, or contractual term or inducement to make the bundled version the more attractive, and a monitoring trustee was required to ensure that the unbundled version of Windows works as well as…

(discuss them and then choose one that would possibly work)

One possible solution for this anti-trust problem, which is currently proposed by authorities, is that Microsoft should allow its competitors to access its information database. In this way, the competition could build new applications that are compatible with the Microsoft operating systems - Windows so would not be affected by the Microsoft strategy to develop an integral and connected line of products. Another solution could be the individual taxation of Microsoft due to its market power. In this case, the taxes that could be as high as 0% from the total profits and would unfairly tax the advantage taken in time by Microsoft. The money for this tax could be otherwise used by Microsoft for development plans, or why not for resolving social aspects - the poverty reduction of third world countries.

Another answer proposed by analysts in this case…

Finance-dominated proponents also maintain that boom economic periods generate a more varied divergence of valuations that fuel merger activity (Medlen 2007). In this regard, Medlen concludes that, "Taken collectively, these understandings may explain some of the merger activity in booms, but they involve certain asymmetries that undercut their explanatory power. High stock valuations allow stock to be utilized as currency and collateral for takeovers; yet stock booms also make targets expensive" (p. 202). Moreover, despite the commonly held perception that mergers are a "quick and dirty" way to grow a business and achieve organizational goals, there remains a lack of convincing empirical evidence in support of this perception (Medlen 2007). As Medlen points out, an "anomalous fact about mergers concerns the lack of evidence that mergers are profitable. This fact begs the question: why then are mergers carried out with such frequency and with such large levels of capitalization?" (p.…

The effect of all of this is to drive away those who actually worked the land because they loved it, replacing them with hired hands running machinery, neither of which is likely to be kind to the land.

Monopoly

Perhaps the most familiar form of business except for perfect competition, monopoly situations result when there are many potential buyers for a product or service, but only one seller.

In the Grapes of rath, a monopoly situation is created as the banks decide to remove tenant farmers, preferring to sell the land to a single large conglomerate of landowners or even a single corporation.

Steinbeck could hardly have painted a harsher picture of this monopoly-in-progress, with scenes of huge bulldozers razing all evidence of the tenant farmers from the land. However, he also notes that the 'monopolization' of the Great Plains was seemingly an event bigger even than those landowners who…

Economics for Business

The company that I am studying is Apple. The company is a designer and marketer of consumer electronics, specifically computers, smartphones, tablets, mp3 players and software. The company has experienced a strong run of great performance in recent years, but it has not always been that way for Apple. The company struggled considerably, especially in the 1990s, before breaking loose. The key thing about Apple is that it has always sought to differentiate itself. Over the course of the past ten years, we have seen most of Apple's former competitors in the personal computer space leave the industry. The reason is that the computer industry is moving towards the strategic hell of perfect competition.

Strategy Hell

The term strategic hell reflects the condition of perfect competition. In the real world outside of economics textbooks, few markets can be truly understood to be perfectly competitive. Perhaps a vegetable…

Smith believed this would lead to inefficiency.

However, unlike Plato, Smith did not believe that the ideal republic should decide from birth what occupation an individual should follow, rather that the individual must freely choose by his or her own will, how to direct his or her energies and labor in the most efficient and self-interested fashion, which would ultimately result in the advancement of the nation as a whole. Plato's social structure, although not based upon birth, was still based upon a monopoly of philosophers dictating the lives of others according to their state-generated power, unlike Smith's more democratic ideals. Smith's analysis more perfectly echoes that of illiam Petty, who stressed how breaking down tasks, like Smith's pin-manufacturing plant, could generate higher levels of efficiency in economic production. Petty also placed a strong emphasis, as did Smith, upon the vital need of a nation to practice free trade.

Question…

Micro Economics: Chapter Summaries

Microeconomics Chapter Summaries

Summary 'Chapter 7: Monopoly'

Market power refers to the ability of one of more firms in an industry to impact the pricing and supply of products and services for general consumers (Hall & Lieberman, 2010). A firm holding market power experiences a downward slopping demand curve. Monopoly is one of the four major types of market structures (Boyes & Melvin, 2009). It refers to the dominance of only one supplier (or producer) over the entire market (McEachern, 2012). Since a monopolist firm does not have any direct competitor in its industry, it sets prices and supply options itself. Unlike other market structures, monopoly has only one market demand curve, i.e. The demand curve for the monopolist firm and for its industry are same (Shiller, 2009).

Being the only supplier in the industry, this firm can impact the prices of products or services by…

Therefore, a country which is able to produce one good with a lower opportunity cost than another country, should specialize in producing that good which will turn into a competitive advantage.

However, when assessing this theory at the level of international trade, it is harder to depict the competitive advantages. The model may seem to be unrealistic. The resources employed in real world are not restrained to labor and the markets in which the goods are supplied are not perfectly competitive. Moreover, there may be countries able to specialize in the production of one or several goods and other countries unable to find any competitive advantage. Other disadvantages are the ones assembled when trying to form a general framework of the labor costs. Due to the fact that these costs are similar within the boundaries of a certain country and vary from one country to another, it is problematical to…

Health Care Economics

Monopsony power is defined as a situation where there is only a single buyer in the market (Investopedia, 2014). In a monopsony situation, all of the bargaining power rests with the buyer, such that the seller is a price taker, and also a taker on term as well. The buyer therefore pays what it wants, and on whatever terms. A monopsony is an unusual natural market condition. In some situations, monopsony is related to monopoly, a good example being health care in Canada, where the government is the employer. With a government monopoly, there is also only one buyer for health care supplies, and health care labor. Unions can also constitute a monopsony in labor, in situations where non-union workers are prohibited. One must work to the terms that the union has negotiated, or not at all. This paper will look at the nursing shortage in the…

It offers a good theory as it emphasizes on the production and export of those items for which a country possesses a comparative advantage. Furthermore, through its focus on the reduction of taxes and tariffs in international trade and the adherent practices, the theory of comparative costs has set the basis for the contemporaneous processes of market liberalization and globalization.

But the theory has not been spared from criticism. Oumar Bouare states that "the market price of a commodity does not converge toward its natural price. (Then) the outcome of complete specialization in icardo's framework locks third world and developing countries out of industrialization; and free trade could destroy the industrial base of a country, which in the long run could generate more wealth for the country than an imported product. This might also lock the country out of industrialization." b) in 1848, utilitarian economist John Stuart Mill wrote the…

S. consumers. Although the government should not support protectionism and protect inefficient American industries simply because they are American, it should require that companies selling products in the U.S. Or even partially based in the U.S. meet certain basic human rights standards (no slave labor, for example) and safety standards. This is necessary to protect U.S. consumers and also to ensure that America's reputation for freedom as well as economic growth is sustained.

Redistributing income

Some unintentionally redistributive effects, such retaining a progressive income tax system to help poorer families survive while still remaining part of the workforce seem to be beneficial and necessary. Making charitable contributions tax-deductible is also an excellent idea to encourage redistributive effects, but no government can or should engineer a system where everyone is the same economically, without taking away the incentive to work.

Individualistic minimum

However, government production would be acceptable when private marginal…