ipl-logo

Market Dominance In A Monopolistic Market

955 Words4 Pages

1. Introduction

Free competition is an important part of a market economy. The ideal market would be a perfect competitive market, in which the price follows from the equilibrium of the supply and demand curve and in which there will always be free competition. But in some markets there is no free competition and there are no fair prices. This can be the case when there is a dominant supplier in a market segment who abuses its power. These companies then have a so-called market dominance in a monopoly. The definition of a monopoly runs as follows: if a firm, or a group of firms, substantially or completely controls a product or service in a given geographic area, they have a market dominance in a monopolistic market. (Competition Bureau, 5th November …show more content…

Obstacles to entry are called barriers to entry. They can be divided into natural and artificial barriers. Natural entry barriers include: ownership or control of a key scarce resource, high set-up costs (fixed costs) or high research and development costs. Artificial barriers include: predatory pricing (deliberately lower price), limit pricing (selling at a price below average total costs of potential entrants), predatory acquisition (taking over a potential rival by purchasing shares), vertical integration (as manufacturer having its own retail stores), advertising and patents (Economics Online). These barriers to entry hinder the free competition in this market. The EC wants to limit these barriers, but the natural barriers can not be effaced. Therefore, there will always be barriers to entry a market. The EC discovered that Gazprom creates artificial barriers to entry the gas market. Gazprom for instance has control over major gas pipelines to Bulgaria and Poland. They are able to prevent new gas suppliers from entering the market with the control over these

Show More
Related

  • Why Did The Number Of Corporations Increase In The Late 1800s

    696 Words  | 3 Pages

    425 A monopoly is the total control of a type of industry by one person or one company. What is a holding company? Pg.426 A holding company is a company whose primary business is owning a controlling share of stock in other companies.

    Read More

  • How Did Monopolies Affect The 1900's

    597 Words  | 3 Pages

    Monopoly is not just a board game people play for fun, monopolies became powerful and affected the late 1800’s and early 1900’s. Monopolies are the exclusive possession or control of the supply or trade in a commodity or service. Basically, monopolies are firms that have a lot of market power. They greatly controlled industries and played a role in the government, such as helping president President Benjamin Harrison. Monopolies dominated their own industries and were huge for the industrial period in the United States.

    Read More

  • Monopolies In The 1900s

    992 Words  | 4 Pages

    Corruption was prevalent in the United States during the 1900s. Fraud existed in major industries, such as monopolies or unsafe working conditions. Several people wanting reform wrote books and articles about the industries which made a large impact on the consumers and users of industries. This put pressure on the president to make changes in regulating these industries. Muckrakers, a group of journalists, exposed corrupt issues to the American public, which brought reform to many major industries such as oil, railroads, and government.

    Read More

  • Examples Of Monopolies In The Titans Of Industry

    190 Words  | 1 Pages

    Through the introduction of new business practices such as vertical and horizontal integration industries were able to facilitate rapid growth. The “Titans of Industry” John D. Rockefeller, J.P Morgan, Andrew Carnegie, and Vanderbilt built, respectively, their own monopolies in which they justified how their actions were actually “improving the lot of humankind” and how through Social Darwinism they were “justified in their overbearing behavior” (Shultz 301). Social Darwinism derives from the theory of “survival of the fittest” which was applied to the “contemporary economic environment” creating racialistic views on minorities from that era such as the following: women, African Americans, certain types of immigrants, and Native Americans (Shultz

    Read More

  • Monopolies In The 19th Century

    367 Words  | 2 Pages

    Due to government support of the monopolies, often violent methods to control unions , the bad reputation of unions, and the hopes of riches the reform efforts failed in the nineteenth century. Many groups such as American Federation of Labor (AFL), Knights of Labor (KL), and The Farmer’s Alliance attempted to stop the ever extending reach of the monopolies control which used government troops to halt the unions. The government support of the monopolies and violent methods used to control unions significantly halted the labor movements that attempted to correct what they viewed as faults in monopolies. The use of militia men and pinkertons to forcefully remove the unions.

    Read More

  • Monopolies In The United States: The Gilded Age

    1971 Words  | 8 Pages

    The period from 1865 to 1900 was characterized by an astronomical boom in industry and manufacturing, economic growth for the rich, financial turmoil for the poor, and political corruption. As a result, the era has been named “The Gilded Age.” Just as something gilded is gold on the outside but worthless metal on the inside, these years seemed prosperous from an outside perspective, when in reality, the wealth gap was increasing at an alarming rate and big business had power over government officials. As a result of this, a lot of federal legislation was influenced by monopolies and often catered to the desires of businessmen. Since regulation of certain business practices would cause these trusts to lose money, Congress shied away from regulating

    Read More

  • Problems Jacob Riis Faced During The Progressive Era

    849 Words  | 4 Pages

    Web. 17 Nov. 2015. Some of these companies were monopolies. Monopolies were the business that tried to all control over their product so then they could price it at any price they wanted.

    Read More

  • Robber Barons And John D. Rockefeller

    218 Words  | 1 Pages

    Even further, these robber barons would often ruthlessly eradicate competition by buying out other companies to establish monopolies through the horizontal and vertical integration of production and product.

    Read More

  • Monopolies During The Progressive Era

    408 Words  | 2 Pages

    During the Progressive Era there were multiple of changes occurring that people became overwhelmed. New resources in the oil market, industrialization, fights for equality. There were many factory jobs, however, no one to stand up for the workers. So of course people will turn to their government for help, the power house of the country. However, even the government was picky in what they helped with.

    Read More

  • Premier Inn Swot Analysis

    1718 Words  | 7 Pages

    The temporary character of competitiveness, which can be lowered anytime. 4. The massive spending on technological advances. 5. The brand image misconception in which low prices are usually associated with low quality product.

    Read More

  • Pros And Cons Of The Sherman Anti Trust Act

    1277 Words  | 6 Pages

    This also causes involving price-fixing and market-division arrangements. It usually involves the private parties and the government which would also be the Department of Justice or the Federal Trade Commission. This is a firm has done something anti-competitive in order to stay ahead in the game or stay ahead in the monopoly. Monopolies without any anti-competitive behavior aren’t usually illegal. An example of these cases was in 1911 and the Supreme Court ruled abuse on John Rocketfeller's Standard Oil Co. because they had abused its monopoly power to keep other companies from going against it and it also divided into thirty-four separate companies.

    Read More

  • Disney Oligopoly: The Market Structure Of Walt Disney

    1249 Words  | 5 Pages

    Market Structure - Oligopoly Oligopoly is a market structure whereby a few number of firms owns a lion’s share in the market. This market structure is similar to monopoly, except that instead of one firm, two or more firms have control in the market. In an oligopoly, there are no upper limits to the number of firms, but the number must be nadir enough that the operations of one firm remarkably influence and affects the others (Investopedia, 2003). The Walt Disney Company is categorized under an oligopoly market structure.

    Read More

  • Porter's Five Forces For Bicycle Industry

    724 Words  | 3 Pages

    When capital markets are enables to offer funds, increase the risk of competitive entrants. The industry will becomes a magnet to new if a firm have a very high profit. Unless got way we can solve this problem if not the competition and competitor will increase. Firms in an industry try to keep the new entrants low by barriers to entry, first is economies of scale. An economy of scale is when an industry is characterized by large economies of scale for new firms to enter and participate, if they are willing to accept a cost disadvantage.

    Read More

  • Coke And Pepsi Case Study

    1101 Words  | 5 Pages

    Hence we assume this to be a situation of duopoly. The 2 companies sell products which are very close substitutes and are constantly fighting for greater market share. A person may buy a Coke product instead of a Pepsi one, and vice versa. The objective of both is to maximize their profit.

    Read More

  • Oligopoly Case Study

    1870 Words  | 8 Pages

    This market usually exists when there is only one firm in the sector/industry. A monopoly usually has no close substitutes. For example: a local electricity company, or a railway service in a city. In order for these firms to be able to maintain their monopoly

    Read More

More about Market Dominance In A Monopolistic Market

Open Document