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Running head: MONOPOLY 1

Monopoly

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MONOPOLY 2

Monopoly

Monopoly is a market structure which has a single seller who merchandises a particular

unique commodity in the market. The level of competition is diminished as the seller is the only

supplier of the commodity. The commodity usually lacks substitution, and thus, no competition

is experienced by the seller. Remarkably, monopoly is characterized by different factors

including patent, copyright, and ownership of the resources, government license as well as a

highly cost while starting a monopoly business. The above characteristics thus make the business

person who is operating a monopoly business to establish prices and also control the market.

There are different types of monopoly including the natural monopoly, technological

monopoly, geographical monopoly and government monopoly. In the natural monopoly, the

costs are reduced by having one supplier of a given product. A natural monopoly occurs where

there are many factors which make competition unworkable. More so, a natural monopoly is also

experienced in financially infeasible situations. The local telephone carriers are a great example

of natural monopoly where the infrastructure required in creating wireless connections becomes

too expensive for the customers (Foster, 2014).

In a technological monopoly, exists under the rules that a business requires copyright or

patent for the operations to be initiated and continued. As such, the technological monopoly is as

a result of legal protection. For instance, in an electronic business where a patent and or

at different prices. Pharmaceuticals are also examples of technological monopoly as the products

precise components making it hard and expensive for the competitors to create similar

commodities (Foster, 2014).

MONOPOLY 3

Geographic monopoly, on the other hand, exists where only one business sells a

particular product to a given locality. The customer basis prevents competition in the geographic

monopoly. For example, in small towns or rural areas where there is a single grocery shop

serving all the members of the location, the supplier conducts geographic monopoly (Foster,

2014).

Government is a monopoly under the necessity, and it is the major governing body in a

given country. The governments are responsible for producing regulations to different

monopolies, and thus the institution itself is a monopoly. Some of the departments that are

controlled by the government include the national parks that are in the country, fire departments,

police departments among others including the holders of the identity cards in the country

(Foster, 2014).

There are two distinct monopolies in UAE; the unique car dealership monopoly as well as

the government monopoly. The car dealership makes revenues through the regulations created by

the government on the prices of the cars produced in UAE. However, the customers are

manipulated by the prices, and the situation would be solved if the monopoly was broken by

competition (Chilton, 2011).

Monsanto and Luxottica are two examples of monopolistic companies in the United

States. Monsanto has been dealing with genetically modified products since its foundation in

1901 and has expanded worldwide and thus a great revenue maker for the United States.

However, the monopoly is faced with challenges which pose a disadvantage including resistance

to GMO technology in different parts of the world. Luxottica, on the other hand, deals with eye-

wears especially glasses worldwide. The products are budget conscious and thus making it hard

MONOPOLY 4

for competitors to supply the same products (Davis, 2018). Most of the customers are thus

limited to the products.

References

Foster, J. B. (2014). The theory of monopoly capitalism: An elaboration of Marxian

political economy. New York, NY: Monthly Review Press.

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