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Monopolies in Todays Market - Essay Example
A monopoly has been a controversial subject in the global economic discourse due to its power in controlling the market it operates. A monopoly is a market structure where there is a single seller or one provider of a kind of product or service. A monopolist therefore is a single seller or supplier of a product or service which has no close substitute…
Atimes, monopolies exist as a result of government backings in which case the monopolies provide goods, products or services which the government considers essential to the well being of the people.
The absence of supply curve in the monopolized market causes inefficient allocation of society's resources. Therefore there is that tendency for a monopolist to charge high prices and probably making higher profits compared with firms in perfect competition.
The objective of this paper is to unravel the role of monopolies in today's market and the implications of technology and systems on the monopolies. The rest of this paper examines different types of monopoly, its revenue, monopoly and price discriminations, and implications of technology and systems.
(a) Pure Monopoly: This is a type of monopoly that exists in a particular region or city in which its products have no close substitutes. This makes it possible for the monopolist to charge extra prices because their products are necessities.
(b) Natural Monopoly: A monopoly that exists because of economies of scale it enjoys in which large scale production brings lower average cost. ...