I’m working on a economics discussion question and need guidance to help me learn.please respond to each discussion response below stating what you like about it. 100 words total 50 words for each response please 🙂
#1. A monopoly is a form of market structure that is characterized by the sole or single seller. The seller being the single producer of the product or service enjoys enormous market power. A monopoly firm is the price maker. The government does not interfere in its working while it sets the rates of the products & services it offers. By maintaining a monopoly, the producer can easily avoid competition and discriminate prices to earn huge profits. Since there are no close substitutes for the products or services that a monopolist offers, a monopolist can earn huge profits.
The uniqueness of the product or service makes a monopolist successful. These are few essential things that we can learn about monopoly. The social media market we don’t think is a monopoly, but in reality, it is. Facebook is the leader in the social media market with a maximum percentage of the market share. It’s considered a monopoly because it lacks direct competition for any competitor. It has pricing power and has the dominant user base all over the world. Social media is the new market in the current century; while the users are offered free services, the companies earn from the advertising revenue. The company is ahead of all its competitors like Google+, Twitter, etc., and has seen both organic growth in the number of users and social media advertisers and acquisition of other companies like Whatsapp, Oculus Rift, etc. Moreover, in 2014, it also acquired WhatsApp who gave 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 an excellent example of a monopoly in the social media market.
#2.An example of monopoly in the real world would be the American Tobacco Company. The American Tobacco Company is no longer a monopoly because there are many other companies in the market that produce tobacco now, but the company has a lot of historical significance when it comes to monopolies. The American Tobacco Company was considered a monopoly because they controlled the cigarette market.
The company took over several tobacco manufacturers and became the leading seller of tobacco products. In 1907, a federal court ruled the company a monopoly and dissolved it. My example was a true, unregulated monopoly before it got dissolved. True monopolies is a form of market structure that only has a single seller and producer. A monopoly sets the price for a product and controls its whole market. The producer avoids competition and by so earns huge profits. A monopoly is successful because there are no products like it which makes it original.
Requirements: 100 words
