The Monopoly and It's Impact on Life

What are Monopolies?

         Monopolies are generally when one company or a group of companies control the supply of a product or service, in which there is not a close substitute or competition for the product. They are the only one that provides this service, so thus they have control over the price and other aspects. Monopolies that are considered bad and breaking the law are the ones that increase the price on a product over what it is worth, and thus give consumers a bad deal on their product or service because of the lack of competition. Not all monopolies are necessarily bad for consumers. Some places such as small towns where there is only one store, could be considered a monopoly, since another store could not be supported there. Another form of monopolies are oligopolies, in which a small number of companies dominate the industry and each company's policies are influenced by each other because there are so few sellers. In the United State some oligopolies are considered to be the automobile and the computer industries. The opposite of monopolies are pure competition, in which there are a large number of producers selling very similar products. These are just as rare as monopolies, and the only true industries this happens with in the United States is the sale of wheat and other agricultural products. Monopolies have existed for a long time, with early monopolies happening with European shipping companies that operated during the Renaissance under royal charters, but in recent times the monopoly is beginning to be looked at again as the communications age comes out, and new technological products make it hard to tell where to draw the line for companies.

Why are there Monopolies?


Last Updated January 31, 2002