The article written by Thomas J. DiLorenzo entitled The Myth ofNatural Monopoly, as the title states is about unravelling and explaining the natural monopoly myth. Natural monopoly is defined as a monopoly in which only a single firm can obtain the utmost benefit from the industry it is in. This usually happens when there is an extremely high fixed cost in production. As production increases, the long run average cost of production decrease as fixed cost is spread over the units produced. It would be more beneficial for the manufactured product to be produced by only one producer since more investors would possibly bloat the price considering the high fixed cost involved in manufacturing.
The aim was to gain stability from domestic sales and strengthen its position via overseas expansion. In 2001, it had its first international success. They had sold 10 units of its Fengyun- its first domestic model to a Syrian dealer. In 2003, Chery Motor Co. became the first Chinese company to open a foreign production facility when it began manufacturing several models in Iran. Some more plants were opened, in Russia in 2005 and Malaysia in 2006.
A monopoly is a market structure, where there is only one supplier or entity of a good or service in the market. In reality, a firm is categorised in UK as a monopoly when it has at least 25% market share (Economics Help, 2012). Monopolies can emerged from “exclusive ownership of a scarce resource, granted monopoly status by the government, exclusive patents or copyright to sell a product or protect their intellectual property” (Economics online, anon) or mergers and acquisitions to sell a good or service. One of the key characteristics for a monopoly is that the monopoly firm is a price maker because there is lack of competition. This position allows the firm to obtain abnormal profit in the long run when it operates at the profit maximising point, where marginal cost equals marginal revenue.
When Harrison was chosen for the precidency he choosed to have the taxes over imported goods increased. By doing this he won support because this helped not only the business men but the country in general. Since people stopped importing and started buying what the united states produced the state won more money. The spoil system was a big issue of corruption in the guilded age. It often hold a battle between the two political parties.
The characteristics of an oligopoly market includes few sellers offering homogenous or standardized products, mutually dependent firms and low barriers to entry. There are few examples of oligopolistic industries which is smartphone operating system industry and automobile industry. In this case, smartphone operating system industry such as Andriod OS (Google Inc.) and Iphone Os / iOS (Apple). While for automobile industry, examples include Honda and Perodua. It can only be operated by bigger companies and every companies have different goals to achieve.
A monopoly is characterized when a single supplier in the entire market own a specific product, so that from that specific product, or products, they own the entire market share. A monopoly is also defined when a company own 25% of that market, meaning they have a huge part of the market share. There are many reasons why a monopoly may form for a specific product. One of the reasons is when a company has the ownership of a specific requirement for one specific product, and example is how Apple owns the IO Software. Microsoft owning the Windows software, so in that are they are monopolizing that market, with those specific software.
There are two different types of competition in a market, monopolistic competition and free competition or also known as perfect competition. An example of a monopolistic competition or monopoly is the market in China, where only one company or firm distributes resources and good. An example of a perfect competition is the United States or Singaporean market in which people are free to enter or exit the market. The question is, is a free market competition better than a monopolistic market competition? A free market competition is better than a monopolistic competition because there is little constraint for people to enter or start a business in the market and consumers are able to set the price based on the demand vs. supply concept.
There is an assumption among the consumers that there is a non-price difference amongst the competitor's products. There are very few if any barriers to entry and exit and finally the producers control the price up to a specified degree. It's essential to note that in the long run, monopolistic competitive market characteristics are almost the same as of those of the perfectly competitive markets. Their two main differences include production of heterogeneous products by the monopolistic competition and the involving a lot of non-price competition based on the product differentiation. In the short run firms that make profit will break even in the long term because of demand increases and the average total cost increases.
The characteristics of a market, its principles and structure which affect the nature of competition and pricing are known as market structures. The market structures are competitive markets, monopolies, and oligopolies and all of these have both advantages and limitations of supply and demand. Each type of market structure has as main concern maximizing profit by subtracting the total cost from the total revenue, and this is being determined in each market structure by different measures. A competitive market is characterized by numerous buyers and sellers who offer homogeneous products and the prices for these products are being established by the market. The high competition in this type of market leaves the sellers with a very low bargaining
History monopolies reach antiquity. Monopolistic tendencies in different forms and to varying degrees occur at all stages of development of market processes and accompany them. But their recent history begins in the last third of the XIX century (especially during the economic crisis in 1873). The interconnectedness of phenomena - the crisis and monopolies - points to one of the causes of monopolization, namely: many companies try to find salvation crisis turmoil in monopolistic practices. It is no accident monopoly were called at that time in the economic literature, the "children of the crisis."