Is it true that monopolies do not exist in our economy? Please explain
While we no longer have any true monopolies, we do have virtual or near monopolies.
http://247wallst.com/commodities-metals/2010/11/12/the-next-7-american-monopolies-nflx-siri-lulu-awk-fico-mcp-mon/
http://247wallst.com/investing/2011/03/22/the-new-generation-of-american-monopolies/
http://www.huffingtonpost.com/2011/03/24/the-new-generation-of-monopolies_n_840234.html
To determine whether monopolies exist in our economy, we need to define what a monopoly is. A monopoly is a situation where a single company or entity has exclusive control over a particular product or service, with no or limited competition.
In the context of our economy, it is not entirely accurate to say that monopolies do not exist, but rather that they might not be as prevalent as they once were. In many economies, including the United States, there are laws and regulations in place to prevent the formation or abuse of monopolies. These laws aim to promote healthy market competition and prevent anti-competitive practices.
To understand if a monopoly exists, we need to analyze the market structure. There are four basic types of market structures: perfect competition, monopolistic competition, oligopoly, and monopoly. In a perfectly competitive market, no single entity has control over the market, whereas in a monopoly, a single entity has complete control.
While it is difficult for a true monopoly to exist in today's economy due to regulatory measures, there are instances where certain industries have dominant players that may possess significant market power. These companies can have a considerable market share, control supply, set prices, and act in a way that limits competition. However, it's important to note that these dominant players might not be technically considered as legal monopolies.
To determine if a company is a monopoly or possesses market power, several factors should be evaluated, including market concentration, barriers to entry, market behavior, and the legal framework. Measuring market concentration often involves evaluating market shares, industry structure, and examining whether barriers exist that impede new entrants from challenging the dominant player.
Ultimately, to claim whether monopolies exist in our economy, specific market analysis must be conducted for each industry or sector. While true monopolies might be rare, there are instances of companies with significant market power that need to be closely monitored to ensure fair competition and consumer welfare.