Premium Essay

Monopoly

In: Business and Management

Submitted By MarinaHN
Words 906
Pages 4
Introduction
Monopolies are known to be the companies that possess an entire market power in their particular industry. When talking about monopolistic companies, we usually reference to a single seller of goods and services in the market. Monopolies have the ability to control prices on their production. This extreme form of imperfect competition in the market has a negative influence on consumer’s choice. In this paper I will discuss the main features of monopolies and its role in the market.

Characteristics of a monopoly
One of the main characteristics of a monopoly is that it is always one single seller of goods and services in the market. Monopolistic companies do not have any competition which gives them a great advantage of being able to control the prices on their production. The main goal of a monopoly is to make the maximum possible profit by using its price-setting power.
Another feature of a monopolistic company is the fact that since there only one firm in the market, there is no possible way for any other company to enter this market. Of course, this perfect monopolistic company does not exist in the modern world.
Today we can see very few examples of monopolies. One of them is the famous Microsoft Corporation, one of the largest PC software providers. Microsoft has been dominating in the market for years and used to own a great percentage of this industry’s market. The company made it almost impossible for its competitors to survive, by offering their services on very affordable prices and tying up their system to, pretty much, every new personal computer. Microsoft faced anti-trust allegations for tying up the Internet Explorer web-browser to their operating system. This is another instance of proof that this company possesses a monopolistic power. Microsoft is now limiting consumer’s choice, by pre-installing their web-browser to a new...

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