3 thoughts on “The popular misunderstanding of the word “monopoly” (Part 1)”

  1. Posted 11/12/2017 at 07:13 | Permalink

    In general, most economists describe a monopoly in the same way and it is often negatively associated. A monopoly is a market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competition, as he is the single seller of goods with no close substitute.

    Characteristics associated with a monopoly market make the monopolist the market controller as well as the price maker. The monopoly enjoys the power to prevent competitors from entering the market which leads to absence of competition. So natural monopolies occur when a company takes advantage of an industry’s high barriers to entry to create a protective wall around its operations. The utilities industry is a good example of a natural monopoly.

    The consequences for consumers are higher prices and limited choice. Therefore, Antitrust laws and regulations are put in place to discourage monopolistic operations – protecting consumers, prohibiting practices that restrain trade and ensuring a marketplace remains open and competitive.

  2. Posted 13/12/2017 at 03:40 | Permalink

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