What are the sources of Monopoly and wh
What are the sources of Monopoly?
A monopoly is defined as a market structure where one firm supplies all output in the industry without facing competition. Monopolies arise from barriers to entry, which make it difficult or even impossible for new firms to enter the market.
These economic barriers include:
- Control of natural resources that are critical to the production of a final product, including the uneven distribution of natural resources. For example, the fact that oil is concentrated in certain countries assists in the creation of oil monopolies.
- Cost barriers; economies of scale
+might be so important in some industries that in order to compete, a company must be large. Monopolise are often in a position to reduce prices below a new entrant’s operating costs and thereby prevent them from continuing to compete. Furthermore, the size of the industry relative to the minim efficient scale may limit the number of companies that can effectively compete within the industry.
- Legal barriers; some monopolies are protected by law. A national government for example, may argue that this is in the public interest, for example:
The mail-service monopoly ensures that a single-price stamp will guarantee delivery to addresses anywhere in the country. The monopoly enables cheap local deliveries to cross-subsidise loss-making deliveries to remote places
The fact that dentists, doctors, lawyers and teachers have to belong to a professional body creates a type of monopoly, but ensures that standards are maintained.
Patents, copyright, and intellectual property give a monopolist exclusive control of the production and selling of certain goods. A patent is a government licence that gives the holder exclusive rights to a process, design or new invention for a designated period of time (usually 20 years). For example, new drugs are granted patents that provide the firms monopoly power for a period of time. Copyrights also create monopoly power for a limited period of time,
A monopoly is defined as a market structure where one firm supplies all output in the industry without facing competition. Monopolies arise from barriers to entry, which make it difficult or even impossible for new firms to enter the market.
These economic barriers include:
- Control of natural resources that are critical to the production of a final product, including the uneven distribution of natural resources. For example, the fact that oil is concentrated in certain countries assists in the creation of oil monopolies.
- Cost barriers; economies of scale
+might be so important in some industries that in order to compete, a company must be large. Monopolise are often in a position to reduce prices below a new entrant’s operating costs and thereby prevent them from continuing to compete. Furthermore, the size of the industry relative to the minim efficient scale may limit the number of companies that can effectively compete within the industry.
- Legal barriers; some monopolies are protected by law. A national government for example, may argue that this is in the public interest, for example:
The mail-service monopoly ensures that a single-price stamp will guarantee delivery to addresses anywhere in the country. The monopoly enables cheap local deliveries to cross-subsidise loss-making deliveries to remote places
The fact that dentists, doctors, lawyers and teachers have to belong to a professional body creates a type of monopoly, but ensures that standards are maintained.
Patents, copyright, and intellectual property give a monopolist exclusive control of the production and selling of certain goods. A patent is a government licence that gives the holder exclusive rights to a process, design or new invention for a designated period of time (usually 20 years). For example, new drugs are granted patents that provide the firms monopoly power for a period of time. Copyrights also create monopoly power for a limited period of time,