So, they are dictating the size of their output. Mining Industry: In certain countries, mining companies (for instance, oil) hold exclusive rights over certain land areas and resources. So, they are limiting consumer access to medicines, leading to price increases by suppliers benefiting from monopolizing such medication production efforts. Healthcare: Pharmaceutical companies hold patents over various life-critical medications without real substitutes or generics in the market.Music Streaming Services: With few major players in the market-dominating music streaming services like Apple Music, Spotify, and Amazon Music, they hold a significant share of access points available across global markets, whereby consumers rely on competition-free distribution represented by a handful of providers.Airports: Strong governmental regulations around building airports makes accessibility limited only to those who can withstand the financial investment needed, which allows monopolistic tendencies to arise over space control ultimately toward air traffic – operations, ground handling, and aircraft maintenance management.Agriculture: Agricultural markets can be dominated by producers wielding economies of scale such that only large firms can compete effectively, reducing competitiveness while negatively influencing consumer pricing.National Postal Services: In many nations, postal services often have legal frameworks protecting their dominance in specific areas for national mail delivery alternatives and thus have no real competitors enabling them to dominate that market segment completely.Utility Companies: A typical example is energy utilities monopolizing a local market due to having exclusive access to the infrastructure that delivers electricity and gas to homes and industries in certain areas.Railways: In many countries, especially those with a single railway service provider, the railroads have a monopoly over freight and passenger transportation.Nevertheless, authoritarian nations like Vietnam tend to monopolize media in state hands to control the narrative, in what we call state monopoly. Media: Generally, media laws attempt to minimize the likelihood of a private monopoly taking over (although, the Murdoch empire tries!).Consider using keywords in your definition such as “control”, “goods and services”, and “competition.” Examples of Monopoly Overall, monopoly refers to a market structure in which a single seller or producer dominates the market for a specific product or service.Ĭomprehension Checkpoint: Write your own paraphrased definition of a market monopoly. This, in turn, leads to negative outcomes for consumers who are vulnerable when sole sellers raise prices without fear of being undercut by other sellers. However, left unchecked by regulatory oversight agencies, monopoly firms may abuse their market power in various ways, such as limiting output production quantities or charging high prices because consumers have few alternatives. In some cases, monopolies can benefit consumers through the economies of scale derived from production efficiencies that result in reduced costs for items they purchase. “…market monopolization is a completely natural process for the market since every firm seeks to absorb the whole industry” (p. Monopolies can arise due to a variety of factors, such as barriers to entry, exclusive government licenses or patents, and economies of scale.īorobov and colleagues (2021) believe that: “Opposite to the perfect competition, a monopoly is a market structure characterized by a single seller, selling a unique product in the market” (p. This gives the monopolist extreme power to set prices and manipulate market demand for that particular product.Īs stated by Coppo and colleagues (2020), Monopoly is an economic term that refers to a market structure where one firm or producer has exclusive control over the production or sale of a good or service, resulting in no direct competition (Robinson, 1969). Teachers, if you assign this article for homework, have the students answer these questions at home, then use them as stimuli for in-class discussion. Comprehension Questions: As you read through this article, our editor Chris will pose comprehension and critical thinking questions to help you get the most out of this article.
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