3. entry, in turn, have three main sources: Basically,

3.     
American Telephone
and Telegraph Company (AT&T)

2.     
John D. Rockefeller’s
Standard Oil Company

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

1.     
Andrew Carnegie’s
Steel Company (now U.S. Steel)

The most famous monopolies in history:

1.     
Google. They control
67% of the web search market

Examples of a Modern Monopoly:

·        
Ultimate advantage
for existing

·        
Huge barriers to
entry

·        
One player

Characteristics of monopoly:

The best examples are public
utilities in markets like electricity, water, natural gas and sewage.

Natural monopoly – when it is
more cost effective to have one large producer rather than several competing
firms

Source: Mankiw N.
G. – Principles of Microeconomics, 7th Edition (Mankiw’s Principles of
Economics) – 2014

• The production process: A
single firm can produce output at a lower cost than can a larger number of
firms.

• Government regulation: The
government gives a single firm the exclusive right to produce some good or
service.

• Monopoly resources: A key
resource required for production is owned by a single firm.

Monopoly potentially allows companies
to become powerful enough to prevent competitors from entering the marketplace.
The fundamental cause of monopoly is barriers to entry: A monopoly remains the
only seller in its market because other firms cannot enter the market and
compete with it. Barriers to entry, in turn, have three main sources:

Basically, in a monopoly
companies are selling a unique product in the market, the seller faces no
competition, as he is the sole seller of goods with no close substitute.
Furthermore, in monopolies companies can set prices for their output based on
the demand and supply of the market(https://economictimes.indiatimes.com/definition/monopoly); thus, a monopoly company is a price maker and competitive
company is a price taker.  

Monopoly – is a market
controlled by one seller with a good product or service that has no close
substitutes.