Pure Monopolies And Oligopolies: Walmart Versus Meijer

An oligopolistic market is one that has several dominant firms with the power to influence the market they are in; an example of this could be the supermarket industry which is dominated by several firms such as Tesco, Sainsbury’s, and Waitrose etc... Furthermore an oligopolistic market can be defined in terms of its structure and its conduct, which involve various different aspects of economics.

Two monopolies a majority of americans and the world know of, is Microsoft and AT&T. They are leaders in today's technological age. Both companies came from simply thoughts that innovators put to the test and made happen. Through hard work and dedication, these companies help people across the globe, whether it be a phone call to 911 or using work to write a paper that depends on one graduating from high school or any education. One of these companies was broken up into smaller little companies, which would grow to be very important, and one, even to this day, is still intact and still a leader in computer software.

Monopolistic competition involves many firms competing against each other, but selling products that are distinctive in some way. For instance, stores that sell different kinds of apparel; eating places or markets that sells a variety of food. You can even think about sporting goods and alcohol. These are items that may be similar to a certain extent, but totally different in terms of perception because of the brands, and how they are marketed. When merchandise is unique, firms can have a mini-monopoly on a certain style or a certain brand. However, the companies that make these products have to compete with other brand names. The term monopolistic competition captures this mixture of mini-monopoly and tough competition.

Monopolies are quite dangerous economically, and are usually broken up by the federal government, with only two exceptions- electricity, and gas. These are modern examples. A monopoly is the economic term for when a company that makes a product has no competition, and can raise the prices as high as they want. For example, the most obvious and powerful monopoly of the industrial revolution was the railroad monopoly. They made money quite quickly as a shipping company, and destroyed any and all competition as the only transcontinental railroad at the time. It’s leader, Cornelius Vanderbilt came to be considered one of the most powerful people of all time, due to his control over who he shipped for.

A monopoly is distinguished from a monopsony, in which there is only one buyer of a product or service; a monopoly may also have monopsony control of a sector of a market. Likewise, a monopoly should be distinguished from a cartel (a form of oligopoly), in which several providers act together to coordinate services, prices or sale of goods. Monopolies, monopsonies and oligopolies are all situations such that one or a few of the entities have market power and therefore interact with their customers (monopoly), suppliers (monopsony) and

Individual firm’s market share is tiny compared to the other three market powers, such as monopolistic, oligopoly, and pure monopoly. In a perfect competition system the type of products are homogenous, so each competitor would be selling the same product or service. There is also no barrier to entry so firms can enter and exit the market freely without barriers from regulation or cost.

A natural monopoly is an industry in which one business already exists is not economical because the competing business would not be able to reduce their prices as low as the price of the natural monopoly and therefore wouldn’t be profitable. Natural monopolies are established when multiple firms startup costs are too high to enter the industry.

There are many models of market structure in the field of economics. They include perfect competition on one end, monopoly on the other end, and competitive monopoly and oligopoly somewhere in the middle. In this paper, we will focus on the oligopoly structure because it is one of the strongest influences in the United States market. Although oligopolies can also be global, we will focus strictly on the United States here. We will define oligopoly, give key characteristics important to the oligopoly structure, explain why oligopolies form, then give an example of an oligopoly in today’s economy. Finally, we will discuss the benefits and costs in this type of market structure.

Monopolies played a big factor in the 1870’s to 1914. These originally came to the United States with the colonial administration. Monopoly’s refers to a market structure whereby there is only a single firm operating in an economy. Companies though normally characterized by the absence of competition in the market.

1 - There is a separation of service and payment. Because monopolies are funded through taxation, they cannot go bankrupt - they can always get more funding from the public coffers. Therefore, monopolies have little incentive to be efficient.

Many companies and people have committed monopolies before they were illegal and even after it. A monopoly is when one person has complete control over a company and makes close to 100% of the profits but because of the The Sherman Antitrust Act passed on April 8, 1890, “combination in the form of trust and otherwise, conspiracy in restraint of trade.” In simple terms the act prohibited any forms of monopoly in business and marketing fields. Monopolies committed before the Act, making it legal in every way but unethical, by some of the famously known marketers like John D. Rockefeller making him filthy rich. While others committed after The Sherman Antitrust Act caused a company like Microsoft to be sued and have a bruised ego.

This is where industry regulations come. The regulations discourages the monopolies and oligopolies from charging unfair prices for their products.

There are four types of market structures: Monopolistic Competition, Monopoly, Oligopoly, and Perfect Competition. Monopolistic Competition is also known as competitive market. In this market structure, there are a large number of firms that produce similar but somewhat differentiated products for the same target customers. The market share is also divided among large number of firms making it difficult for one firm to become the market leader. On the other hand, Monopoly is a type of market structure in which only one firm controls the whole industry. There are strict barriers to entry for new firms due to governmental restrictions or the monopolistic power of the firm itself. In Oligopoly, the whole industry is dominated by a few large scale firms that set prices, introduce innovative products, and use heavy campaigns to attract buyers. All other small scale firms follow the changing market patterns set by these oligopolistic firms. Lastly, perfect competition is a market structure in which there are a larger number of firms that produce similar as well as differentiated products for

A monopoly is defined as “a firm that is the sole seller of a product without close substitutes”

There is only one model for monopoly and one for perfect competition but in contrast to these oligopolies have several models to try to explain how they react, examples of these are the kinked demand curve, Bertrand and Cournot models. A non competitive oligopoly is ‘a market where a small number of firms act independently but are aware of each others actions’ (Oligopoly, Online). In perfect competition no single firm can affect price or quantity this is due to intense competition and the relative small size of the firms, on the other hand there is a monopoly market where there is little or no rivalry and firms have control over the market. Oligopoly is a state in-between perfect competition and monopoly where the firm can change its