Monopolies, Oligopoly, Monopolistic Competition, And Perfect Competition

1085 Words Aug 25th, 2014 5 Pages
Monopolies
When understanding the different types f structures it is important to know the different types of markets that there are. Understanding barriers, buyers and sellers with knowing the market share and competition is important to understand what barriers are occurring in the market. The different market structures are Monopoly, Oligopoly, Monopolistic Competition, and Perfect Competition.
Understanding these different type of market structures helps to better understand what type of market is currently occurring. A monopoly is when the companies are state owned and there is no other entry allowed into the market. An oligopoly is when there are many buyers with few sellers which is what makes for tough competition. Monopolistic
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To do so would be to discourage the very effort and innovation that competitive markets are designed to encourage. On the other hand, antitrust authorities have no reason to allow an enterprise to be an economic bully vis-a-vis outsiders and innovators, just because it has received a position of market dominance through past exertions, whether economic or political” (Baker, 1993). When we look at monopolies in today’s current market in the telecommunications industry, many people fear that AT&T will overtake the landline communications market and cause higher prices for all consumers. There are rules that prevent AT&T from telling smaller landline companies that connection exchange rates on the lines will double or triple if they go over AT&T owned or leased lines. This would cause AT&T to monopolize the market if they were allowed to do this because it would cause higher prices and eliminate competition in the market. On the other hand of the AT&T market, they also operate a cellular communications business which also was trying to buy T-Mobile recently but was struck down in court as it would create a mobile monopoly. If AT&T was able to purchase T-Mobile then they would have owned 43.3 percent of the marketshare, leaving Verizon behind them at 34.4 percent and Sprint at 15.5 percent with some other smaller carriers with the remaining percentage of marketshare. The
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