Premium Essay

Evaluate the View That Monopolies Are Always Bad for Consumers

In: Business and Management

Submitted By nishmatts2345
Words 673
Pages 3
A monopoly is a single supplier in the industry and they gain monopoly power if they have at least 25% market share in the market. Although monopolies in the mind of consumers are seemed as bad this may not always be the case, as monopolies may not necessarily abuse their power. Therefore in my essay I will be discussing the benefits of monopolies on consumers, and show that they can have positive effects.

Firstly, monopolies are not seemed as bad for consumers as they can exploit economies of scale. This means that as the monopolies increase their production it can lead to a lower average cost. As shown in the diagram below. It is producing at a level where it can still achieve economies of scale by expanding production. This can help consumers benefit from lower prices. Industries that have natural monopolies such as the steel production or water or electricity companies are inherently more effect then when there are many firms providing the same service. Infrastructure will needlessly double and lead in inefficiency. Society i better off restricting the market to one firm because by producing more it is able to reduce its costs, something many firms cannot do by themselves.

However the extent to which this depends upon whether the monopolies are incentivized to give lower prices to consumers. Like all firms monopolies also have the aim of profit maximizing and therefore they still have the incentive to reduce their sales and charge at a higher prince than in a competitive market, leading to losses to society and profit for them. Also they will seek in maintaining the dominance of a market, which can be bad for consumers.

Secondly, monopolies can help consumers benefit from the research and development the monopoly will be able to carry out. Since monopolies are protected from competition, they can enjoy some profits and therefore be able to invest in…...

Similar Documents

Premium Essay

Monopoly

..."Monopoly" refers to a situation where only one company is providing a unique good or service. Because the firm in question is the only place where the good or service can be found, they have the ability to charge whatever they want, to the detriment of market competition that is the foundation of a healthy economy. I think that the top four characteristics of a monopoly is: 1) they are the only one firm in the market (no competition). 2) Substantial barriers to entry by other firms exist. 3) Lack of substitute product for the monopolist's good. And finally 4) Firm is a price-maker, rather than the price-taker. There are many upsides to being a monopoly, but you must be aware of the barriers there are upon entry. Such as patents, limited pricing in the market, and advertising and marketing just to name a few. There are several different types of monopolies. Two of those would be a Natural Monopoly and a Government Monopoly. A Natural Monopoly occurs when the type of industry makes it financially impractical, if not impossible, for multiple companies to engage in the business. In a Government Monopoly the government will pass laws reserving a specific trade, product or service for government agencies. The legal barriers that are put up prevent other companies from competing with the government. Microsoft is a company that is a debatable monopoly. Microsoft was under investigation a few years back for their antitrust behavior. They were allegedly accused of abusing their......

Words: 613 - Pages: 3

Premium Essay

Monopoly

...Monopoly Public interest is virtual another way to describe consumers’ wants, namely, maximising utility at the lowest price and the best quality. This concept has been contributed by Jeremy Bentham and J.S. Mill referred to “the greatest happiness for the greatest number”. (Handout, 2004, the ‘public interest’) In the market structure, one extreme form, imperfect competition is known as monopoly. The following is going to discuss that monopoly is always against the public interest. To compare with perfect competition (another extreme form), the potential strengths and weaknesses of monopoly will be presented and examine which one can be best to serve the public interest. First of all, a monopoly literally means a sole seller, it occurs when there is only one firm in the whole industry. But in practice, it is difficult to exist. Thus more than 25% market share in the industry is identified as monopoly by its legal definition. Meanwhile monopoly also exists in a certain region, e.g. a local water company dominates the local market as ‘natural monopoly’ which means that market may be too small to support more than one firm to achieve significant economies of scale. A major characteristic of monopoly is high barriers to entry. For example, a specific legal barrier protects monopoly in term of patent on essential processes, copyright and licenses and so on. At the same time, monopoly protects itself from competing through a...

Words: 2227 - Pages: 9

Premium Essay

Evaluate the Pluralist View of the Ownership and Control of the Mass Media

...Evaluate the pluralist view of the ownership and control of the mass media The mass media is the means by which messages and images are communicated to a mass audience, it does this through its various Mass Communication Technologies (MCTs), and for instance the Internet is a very powerful and influential MCT communicating worldwide. MCTs educate, persuade and inform as well as entertain their audience. Media is geographically dispersed and has no limits due to its global domination. It is also culturally diverse and socially mixed. Pluralists believe that the mass media is reflective of social reality, and acts as a 'mirror'. They state that it has a functional role in meeting the demands of its mass audience, and thus owes a duty to the people. Marxists on the other hand would argue that the media constructs desires and creates social reality. In other words it is a sculptor of a worldview and distorts social reality which is based on exploitation of a powerless majority, thus it is an ideological tool of the powerful bourgeoisie and reflects their interests. Over eighty percent of the media is owned by Trans National Corporations. But does ownership have any effect on the media coordinators? According to pluralists the answer is simply no. They back this by highlighting the fact that power is dispersed within society and that different pressure and interest groups all influence the media, which reacts accordingly. For instance Green......

Words: 624 - Pages: 3

Premium Essay

Outline and Evaluate the View That Families Are Now More Egalitarian.

...Outline and evaluate the view that families are now more egalitarian. In the past, families were seen as very traditional with the men back having the role of being the breadwinner and women dealing with the traditional domestic chores as well as other roles such as looking after the children. Whereas in today’s society, families are now more equal. Children today are much more dependent on their families. However some may argue that, even in the contemporary UK, families are still traditional and not equal. A study by Young and Willmott claimed that roles carried out by men and women were symmetrical, (and in the third stage) with a sharing of domestic tasks, childcare and decision making. They found that the roles were joint conjugal roles rather than single. This shows how families are now more egalitarian as tasks and chores were being shared out. However, this study can be criticised as Anne Oakely as she found that women spent 77 hours per week on housework. She also said that women take on a double burden as they have to deal with domestic chores as well as other roles such as looking after the children. As well as this, she claimed that men only have to do a few tasks in order to qualify as a ‘household husband’ and roles were segregated and not joint. This shows how families are not egalitarian. Families are now devoting their time and working around their schedule into family life. Rapoport and Rapoport found that working couples negotiated family and......

Words: 638 - Pages: 3

Premium Essay

Evaluate the Functionalist View of the Family

...The functionalists have a very positive view of the family, as they see society as being based on a set of norms and values, a value consensus, into which society socialises its members. They see society as a system made up of different parts or sub-systems, and regard the family as a very important sub system, that works with other systems like education and the economy to meet the needs of society. The way in which all these systems collaborate is much similar to that of organs in an animal, as they all depend upon each other to function. The family is seen as the basic building block of society. Parsons believes that there are two kinds of family, and that the type of family found depends on the needs of the society at the time. The extended family of three generations was common during the pre-industrial stage, where the family relied upon each other for care in old age, care of children and economic survival. The nuclear family became prominent after the industrial revolution, with the needs of society changing, such as Britain needing a geographically mobile workforce that was capable of moving to get various jobs where they were available. Parsons argued that it is easier for the nuclear family to do so than it was for the 3 generation pre-industrial family. Another functionalist called Murdock largely agrees with Parsons, but says the nuclear family performs four essential functions to meet the needs of society and its members. Firstly, it provides stable......

Words: 1033 - Pages: 5

Premium Essay

Evaluate Marxist Views on the Role of Religion Today

... Evaluate Marxist views on the role of religion today (33 marks) Marxism is a macro theory meaning it looks at the effect of religion on society rather than separate individuals. Being a conflict theory it views the institutions in society to maintain inequality and uphold ruling class dominance- religion is no exception. Religion is considered a tool of social control as it uses hegemony to control the masses and legitimize ruling class superiority- simply used to keep the current status quo existing. Marxists believe that religion acts as the opium of the masses; this refers to the fact that it distracts and dulls the pain of oppression for the disadvantaged and those who feel like second class citizens, such as women or the working class. One example of this is that in the bible, it orchestrates that the meek shall inherit the earth”; this allows people to believe that although they are suffering now they will be rewarded in the afterlife and thus they accept their situation. Another example is that the bible says, “Rich man at his castle, poor man at his gate, god placed them high and low, their state he bestowed.” These examples are used by the ruling class as a theodicy of disprivilege to justify their position to themselves as well as to the masses’ -It acts as a smokescreen and dampens revolutionary spirit, preventing any chances of a revolution. Traditional Marxists argue that the ruling class have complete control of the infrastructure, meaning they control the......

Words: 1205 - Pages: 5

Premium Essay

Evaluate One Argument for the View That Ethics Is Independent of Religion

...3. Evaluate one argument for the view that ethics is independent of religion Ethics is a science of socially accepted values approved, adopted and agreed in practice of social interaction as ideal and relevant for social life.The claim itself speaks that although religion lays a foundation of socially accepted values (sometimes these values are restricted to its followers) but even a staunch atheist can have a personality which is based on ethical and moral values. Consider the example, palmistry deals with prediction of a person’s future by examining their hand, but that does not means a person without limbs has no future in this case the person is simply not eligible for this process just like an atheist who does not believes in religious foundation of ethics but has his/her own understanding and application of it. If we observe, religion’s claim on ethics are basically the same, for example the seven deadly sins in Christianity, The noble eight-fold path for cessation of suffering in Buddhism,the three-fold path of life in Jainism, Five evils in Sikhism,  the path to salvation in Hinduism, moral duties in Islam. All the religion laid an ethical and moral foundation for its followers and believers. But nature breeds so many other living beings that practice ethics without the knowledge of .existence of religion. it has many such examples that directly or indirectly practice ethical values in their actions of day to day lives.   A child who does not understands anything......

Words: 745 - Pages: 3

Premium Essay

Monopoly

...Monopoly Introduction If there is only one firm, can the firm charge whatever they want? Well, that depends on the nature of the good. If consumers have enough options so that good substitutes exist, then the power of the monopolist is limited by the other choices available to consumers. If there is literally no choice, then the monopolist can charge so much that they threaten the very survival of consumers by extracting all discretionary income. All monopolies have one defining characteristic, as they reduce production the price rises. Monopolists take this effect into account and choose the amount that maximizes their profit. There are several connections to trade. We tend to feel far better about our monopolist overcharging their consumers than we do about their monopolist overcharging ours. This is occasionally cause for concern as OPEC illustrates. More commonly, trade challenges monopoly power wherever it occurs by increasing competition and providing more substitutes. The Basic Theory Instead of assuming that no one firm influences the price, this time we assume firms have a unique product and at least some control over price. The more they produce the lower the price and the less they produce the higher the price. This influence is not absolute, they can not charge any price they want. If the price is too high consumers will make do without the good or find a substitute. If the good is an essential with no substitutes then allowing...

Words: 1444 - Pages: 6

Free Essay

Evaluate Whether Amazon Should Be Regulated Due to Its Monopoly Power (12)

...Evaluate whether amazon should be regulated due to its monopoly power (12) Amazon should be regulated due to its monopoly power, as the working conditions for its employees are awful. The company treat workers abusively- an example of this being where Amazon hired paramedics to revive workers suffering from heat-related problems rather than buy air conditioners. Due to their dominance in the book market, amazon have become a 21st century monopoly and thus seem to only care about their profits as a posed to the conditions of their workers. The consequence of this is that Amazon may have a negative image in the media and may lose repeat customers due to their unethical ways. Secondly, Amazon should be regulated due to the brutal way that they also deal with suppliers. Amazon have frequent and on-going fights between their publisher ‘Hatchette’ over the pricing of eBooks. With amazon holding 65% of the e-book market, the company tried to level the pricing of e-books across the board- however other companies objected. Amazon also squeezed the publisher by delaying delivery of its books- sometimes by week. This difficult relationship between amazon, its suppliers and competitors means that the company is isolating itself. This could be a negative as suppliers may not be willing to give them their supplies if they become more and more inconvenient. Also, having good relations with other possible competitors could increase profits for the company as they may be able to work......

Words: 512 - Pages: 3

Premium Essay

Evaluate the View That Society Is Going Through a Process of Secularisation.

...regarding religion, one question was only focused on the views of heaven and hell. These two aspects are clearly christian related and as sociologists know Britain is a multi-faith society. So therefore, this question is not applicable for Buddhists or Hindus just to name a few, it is most likely they would answer “none” or “other” however this would distort the statistics as the researchers would probably present their answer as “not religious” this then leads to a social phenomenon in secularisation. Lastly, the simple truth is numerous people do not take surveys seriously. This is especially the case if they are postal questionnaires such as the UK census. For instance, in the 2001 census 0.7% of the population in the UK listed their religion as “Jedi Knights”, this unfortunately leads to invalid data and thus cannot be trusted. In western societies NRM’s are gaining popularity, because of this sociologists see this as evidence for secularisation. Wilson (1996) sees many of the current NRM’s of having extremely secular aspects to their regime. Such as individualism and materialism. NRM’s are also accused of placing less emphasis on religion as they make it extremely easy to join them and this is not the case in other religions. Berger is one of the main sociologists who agrees with this. He describes sects “as a spiritual refuge for the desperate in an increasingly secular society.” However, other sociologists view that fact that the growth of new religious......

Words: 1341 - Pages: 6

Premium Essay

Monopoly

...Introduction to Economic Analysis- 153400003 AS1 Using examples, discuss critically the costs and benefits of monopoly in modern economies. Richard Itaman Student Name: Allegra Campinoti Student ID: 628548 Word Count: 2100 Monopoly is defined as “a market served by a single seller of a product with no close substitutes.” (388 ,Frank and Parker 2007) For a monopoly to be successful there can’t be any close substitutes that are able to provide a similar product or service the firm is offering. Monopoly can be formed if one or more combinations of five main factors are fulfilled. The first being exclusive control over important inputs, meaning that the firm has a unique product which is very hard to emulate. The second that it exploits economies of scales, the long-term average costs of the production of a certain quantity of a product will be much lower if only one firm is the producer. The third is the existence and use of patents, something that gives the right to a firm for the exclusive use and benefits of a certain idea produced by the firm. “ The protection from competition afforded by the patent is what makes it possible for the firm to recover its costs of innovation.” (390 ,Frank and Parker 2007) If patents were not present competition would cause price to reach marginal cost and the innovation and development would have a much slower pace. The fourth factor is Network economies; this occurs when the consumer’s demand of a certain product increases so......

Words: 3674 - Pages: 15

Premium Essay

Monopoly

...Introduction to Economic Analysis- 153400003 AS1 Using examples, discuss critically the costs and benefits of monopoly in modern economies. Richard Itaman Student Name: Allegra Campinoti Student ID: 628548 Word Count: 2100 Monopoly is defined as “a market served by a single seller of a product with no close substitutes.” (388 ,Frank and Parker 2007) For a monopoly to be successful there can’t be any close substitutes that are able to provide a similar product or service the firm is offering. Monopoly can be formed if one or more combinations of five main factors are fulfilled. The first being exclusive control over important inputs, meaning that the firm has a unique product which is very hard to emulate. The second that it exploits economies of scales, the long-term average costs of the production of a certain quantity of a product will be much lower if only one firm is the producer. The third is the existence and use of patents, something that gives the right to a firm for the exclusive use and benefits of a certain idea produced by the firm. “ The protection from competition afforded by the patent is what makes it possible for the firm to recover its costs of innovation.” (390 ,Frank and Parker 2007) If patents were not present competition would cause price to reach marginal cost and the innovation and development would have a much slower pace. The fourth factor is Network economies; this occurs when the consumer’s demand of a certain product increases so......

Words: 3674 - Pages: 15

Premium Essay

Evaluate Feminist Views on the Role of Religion in Society Today

...Evaluate Feminist views on the role of religion in society today The feminist school of thought is not just an ideology nor paradigm that can be accepted; but has been (and may always will be) a growing political movement for the equality of women, fair treatment of females all over the globe and annihilation of the oppression of patriarchy and misogyny. Feminist pioneers include Oakley and Woodhead who are usually the face of modern feminist ideology. There are many different types of feminists in the world today: Liberal, Marxist, Radical and Black feminists all play a part in the fight for female equality with men and many of their fights have been going on for very long times (one such example is the Suffragettes’ fight for the right to vote). The feminist school of thought is a structuralist theory and a macro-theory, focusing on the entire population rather than mere individuals. However feminists do take on board some ideas from micro-theory schools of thought such as their research methods – an example of this is when Ann Oakley conducted (unstructured) interviews with pregnant women for over 9 hours. On the basis of religion, the feminist school of thought (based on its ontological assumptions) would see religion’s role as a patriarchal and misogynistic apparatus of society. It’s possible to go far into history and look at the misogyny of biblical times to support the feminist’s point of patriarchy in society. Christ Jesus had 12 male disciples. King Solomon,......

Words: 1086 - Pages: 5

Premium Essay

Monopoly

...In economics, a monopoly exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it. Suppose that, instead of many sellers, there are only a few, or even one. Each seller provides a substantial part of the market supply. As a result, the market price will be affected whenever he varies the amount he supplies of the commodity. In other words, he is faced with a downward sloping demand curve. Similarly, on the buying side, when any buyer takes a significant proportion of the total market supply, he will be faced by a rising supply curve. In both cases we have some elements of ‘imperfect competition’. Monopoly is always characterised by number of peculiarities: 1) One firm and many buyers, that is, a market comprised of a single supplier selling to a multitude of small, independently acting buyers; 2) A lack of substitute products, that is, there are no close substitutes for the monopolist’s product; 3) Blockaded entry, that is, barriers to entry are so severe that is impossible for new firms to enter the market. In static monopoly the monopolist is in a position to set the market price. However, unlike a perfectly competitive producer the monopolist’s marginal and average revenue curves are not identical. The monopolist faces a downward-sloping demand curve and the sale of additional units of its product forces down the......

Words: 1445 - Pages: 6

Premium Essay

Divorce Always Bad for Children

...Divorce is always bad for children Divorce, which is usually defined as the legal dissolution of marriage or the termination of an existing relationship or union, is unfortunately familiar in today's society. In marriages with a lot of conflicts, divorce seems to be a final solution. However, the result is not only the legal end of marriage, but also the effect of divorce which children have to experience. For adults, divorce is a conclusion, but for children it is the beginning of the uncertainty. Knowing that things are going to be different after a divorce, but not knowing how can be frightening for most children. In addition, one of the biggest fears for children is change. With divorce, the family they have always known will be different, changes will occur in many ways. Children may have to learn to cope with new things, new schedules or new routines. Moreover, they may no longer have contact with some friends and extended family members; such as grandparents or cousins. However, divorce is not always bad for children. Being in the environment of high conflict marriage can cause children to face multiple stressors. They may want stay away from home as much as possible in order to avoid the tumultuousness at home. Divorce could be a relief to the children and offer them a happier life. The diminution of stress allows them to spend more quality time with family. Nevertheless, this does not mean that a divorce is the only way out of all problems. To sum......

Words: 309 - Pages: 2