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In this scenario, an industry has many businesses that offer similar products or services, but their offerings are not perfect substitutes.
In some cases, this can lead to duopolies. In a monopolistic competitive industry, barriers to entry and exit are typically low, and companies try to differentiate themselves through price cuts and marketing efforts.
However, since the products offered are so similar between the different competitors, it's difficult for consumers to tell which product is better.
Some examples of monopolistic competition include retail stores, restaurants, and hair salons. Also, natural monopolies can arise in industries that require unique raw materials, technology, or it's a specialized industry where only one company can meet the needs.
Pharmaceutical or drug companies are often allowed patents and a natural monopoly to promote innovation and research. There are also public monopolies set up by governments to provide essential services and goods, such as the U.
Usually, there is only one major private company supplying energy or water in a region or municipality. The monopoly is allowed because these suppliers incur large costs in producing power or water and providing these essentials to each local household and business, and it is considered more efficient for there to be a sole provider of these services.
Imagine what a neighborhood would look like if there were more than one electric company serving an area. The streets would be overrun with utility poles and electrical wires as the different companies compete to sign up customers, hooking up their power lines to houses.
Although natural monopolies are allowed in the utility industry, the tradeoff is that the government heavily regulates and monitors these companies.
A monopoly is characterized by the absence of competition, which can lead to high costs for consumers, inferior products and services, and corrupt behavior.
A company that dominates a business sector or industry can use that dominance to its advantage, and at the expense of others.
A monopolized market often becomes an unfair, unequal, and inefficient. Mergers and acquisitions among companies in the same business are highly regulated and researched for this reason.
Firms are typically forced to divest assets if federal authorities believe a proposed merger or takeover will violate anti-monopoly laws.
After the merger, they become the distributor of over types of beer across the world. The marketing companies of beers might be different but their manufacturers are the same.
Facebook is the leader in the social media market with a maximum percentage of the market share. It is considered to be a monopoly because it lacks direct competition for any competitor, it has the pricing power and it has the dominant user base all over the world.
Moreover, in the year , it also acquired the WhatsApp who was giving good uptrend competition to Facebook in the social media segment.
In this way, almost the majority of share for the social media market lies with facebook only. Thus Facebook is a good example of a monopoly in the social media market.
Thus monopoly is the industry or the sector which is dominated by the one firm or corporation. It is the market structure that is characterized by the single seller who sells his unique product in the market and becomes the large enough for owning all the market resources for the particular type of goods or service.
For controlling and discouraging the operations of the monopoly, different antitrust laws are put in the place. These antitrust laws help in prohibiting the practice of restraining the trade and allowing free trade and competition in the market, thus protecting the consumers.
Thus the above-mentioned examples are some of the examples of monopoly in the different industries. Monopoly PLUS raises the classic game to a new level!
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