Oligopoly/Monopoly

What is a monopoly?

A monopoly is a market structure where a single seller or producer dominates the market for a particular good or service, significantly reducing competition. This results in the monopolist having substantial control over prices and supply.

What are issues with monopolies?

Issues with monopolies can include higher prices for consumers, reduced innovation due to lack of competition, and potential exploitation of workers. Additionally, they may lead to less choice and lower quality of products or services.

What is economies of scale?

Economies of scale refer to the cost advantage that arises when a company increases its level of output, resulting in lower per-unit costs as fixed costs are spread over more units of production.

What is a natural monopoly?

A natural monopoly occurs when a single company can provide a good or service at a lower cost than multiple competing firms due to high fixed costs and significant economies of scale, often seen in utilities like water and electricity.

What is the role of government in a monopoly?

The role of government in a monopoly includes regulating practices to prevent abuse of power, maintaining fair prices for consumers, and enforcing antitrust laws to promote competition and protect market structure.

What is a government monopoly?

A government monopoly occurs when a government agency or entity is the sole provider of a good or service, often established to control resources or provide essential services, such as public transportation or postal services.

What is a franchise?

A franchise is a legal and commercial relationship between a franchisor and a franchisee, allowing the franchisee to operate a business under the franchisor's brand and typically involving payment of fees or royalties.

What is monopolistic competition?

Monopolistic competition is a market structure characterized by many firms selling similar but not identical products, leading to some pricing power for individual firms while maintaining competitive pressures.

What is the difference between pure competition and monopolistic competition?

The difference lies in product differentiation; pure competition features identical products with no control over prices, while monopolistic competition includes similar but distinct products that allow for some pricing control.

What is an oligopoly?

An oligopoly is a market structure where a small number of firms dominate the market, leading to limited competition and interdependent pricing strategies among the firms.

Characteristics of an oligopoly?

Oligopolies are characterized by a small number of large firms, interdependent pricing, barriers to entry, product differentiation, and potential collusion among firms.