Pure Monopoly

In: Business and Management

Submitted By purdie
Words 447
Pages 2
In today’s society, there are many different monopolies that are still evident despite the perceived idea that pure monopolies do not exist. A monopoly is the complete control of the entire supply of goods or a service in a certain area or market. Although most firms have some type of competition, rare forms of pure monopoly exist in the business world in some of the biggest companies.
Pure monopoly exists when a single firm is the sole producer of a product for which there are no close substitutes (Brue, 181). Even if firms are not competing directly with one another they are all competing to get the attention of the customers. While having a company, there is an expected amount of rivalry that comes along with it, but then again, in a pure monopoly there is no other competition because of the sole control over the sale or production of a certain product. A prime example of a pure monopoly is the post office. Being that they are the only mailing service that distribute mail to every house every day, exemplifies the rare form of monopoly that still occurs. The market makes their decisions based off of supply and demand. If a company has an abundant supply of a product, simply lowering their price eliminates competition and gains the attention from desperate customers leading to a curve in the demand which results in a pure monopoly. However, the government has always tried to avoid monopolies since the 1890’s and 1900’s with the Sherman and Clayton Antitrust Act that were created to maintain a competitive environment. The results of the U.S effort to contain monopolies and maintain competition by legal means have been mixed (Monopoly, 2014). It depends on the federal courts interpretation of the word monopoly to determine if they will enforce antitrust laws. This information proves that if the government does not believe a pure monopoly is in effect, they…...

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