Essay on Natural Monopoly

According to the theory of the 'invisible hand' of the marketplace, as advocated by Adam Smith, the marketplace naturally determines the optimal price of a good or service. But even Adam Smith viewed the development of monopolies with some trepidation and believed that government intervention was required to cease their proliferation. During the 1980s to the 1990s, it seemed fairly clear to most industry analysts that cable television functioned as a monopoly in a manner that was deleterious to consumers. Cable television had few competitors, except in the form of analog 'rabbit ears' which did not provide the full range of channels or quality that cable provided. In many areas, only a single cable company dominated the market and subscribers had few alternative options.

The Pay TV industry in the US is changing rapidly. There are five main forces according to Porter that can describe this. The first four surround the fifth which is competitive rivalry. These forces help decide if a market is profitable. (Mindtools)

Throughout history, there have been many problems present in the American life. In the time period between the 1800s to the 1900s, there were many problems such as, poor living and working conditions and powerful monopolies. Many reforms were proposed in order to solve these problems. The grisly living and working conditions, along with overpowered monopolies, were both addressed with reforms.

Many utilities are monopolies by having the entire market share in certain areas. With deregulation of these utilities, the market becomes open to competition for market share to begin. In terms of regulation of monopoly, the government attempts to prevent operations that are against the public interest, call anti-competitive practices. Likewise, oligopoly is a market condition where there are minimal distributors that have a major influence on prices and other market factors. This causes market failure, especially if evidence of collusive behavior by dominant businesses is found.

United States vs. Microsoft is one the largest, most controversial antitrust lawsuits in American history. Many claim the government is wrongly punishing Microsoft for being innovative and successful, arguing that Windows dominates the market because of the product’s popularity, not because of malpractice by the parent company. Others argue in favor of the government, claiming that Microsoft’s practices conflict with the free market ideal. There are many arguments for both sides of the lawsuit, but what the case really comes down to is this: does the government have the right to interfere in today’s marketplace? Or is Microsoft violating laws that are rightfully imposed by the government?

One month has to look at competition since the early 1990’s, especially since the act 1996 act. The most effective competition has come from technology evolution that enabled multiple platforms with different product-characteristics and economics to compete. They, in turn, then forced each other into cycles of further innovation. When the telecommunications act of 1996 has passed, there were hints of incipient competition in both the long-distance and video-distribution markets as a result of new technology. Local telephony was still essentially a monopoly. Although wireless was thriving, it was seen primarily as a purely mobile service.”

The progressive era was an era of reform. At the time monopolies controlled production of what they produced. American industrialization was based on the free enterprise system, where people have the right to make their choices in what they work, buy, or make. Businesses used the free enterprise system to their advantage and used their own resources to compete with other businesses and focused on the needs of the consumer to make greater profit. Some businesses used different tactics to drive other businesses out and strove for greater labor with least pay. Eventually, the progressive movement would create the turning point of the century and restore

2 - Monopoly by definition means no competition. So, unsatisfied customers have nowhere else to take their business. Monopolies can treat their customers like scum and not lose any business. Again, they have little incentive for efficiency.

The Australian competition and consumer commission commenced an inquiry looking into Telstra’s rural monopoly in September 2016(4). They concluded that giving service providers roaming capabilities off the Telstra network may have an adverse effect on price levels and there was no evidence that there would be a decrease in Telstra’s pricing through more competition. Currently rural and regional customers benefit from the high competition in metropolitan areas because the industry has consistent Australia wide pricing schedules for their consumer services (5).

All I ever needed to know about microeconomics I learned from the Hasbro board game Monopoly.

2. What are the differences among horizontal, vertical, and conglomerate mergers? Provide real-world examples of each type of merger. What policy do you think the US should follow toward mergers? Why?

Over the past decade, significant changes in regulations, advances in technology, and shifts in competitive dynamics began transforming the cable industry. Companies within the industry were forced to adapt by acquiring economies of scale and scope. American Cable Communication was seeking to acquire AirThread Connections for three reasons. The two companies could help each other become more competitive in an industry that is moving toward bundled package service offerings. The acquisition would help both companies expand into the business market, and lastly American Cable was in a unique position to add value to AirThread’s operations. They could obtain a significant amount of

But, unfortunately due to the enormous cost and very little public interest and demand Time-Warner decided to pull the plug on its nationwide change over to digital lines. This shows that the cable companies are surpassing the consumer demand for technology, making this industry a very hard one to market.

What is a monopoly? According to Webster's dictionary, a monopoly is "the exclusive control of a commodity or service in a given market.” Such power in the hands of a few is harmful to the public and individuals because it minimizes, if not eliminates normal competition in a given market and creates undesirable price controls. This, in turn, undermines individual enterprise and causes markets to crumble. In this paper, we will present several aspects of monopolies, including unfair competition, price control, and horizontal, vertical, and conglomerate mergers.

Oligopolistic Markets are less common, but still prevail in the modern economy. An Oligopolistic business is one with few competitors, basing its revenue off of “outsmarting” its opponents by analyzing their decisions and predicting the outcome. Having an analysis of an opponent provides the basis for Oligopoly, as income is based on providing a product that has more features than another product, released to the public around the same time. The Cellular industry provides a pristine example of the Oligopolistic Market.