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					S&D #31 :
Monopoly

TEST
& CW
 DUE
TUES!
                Monopoly
1.   1 Firm / Supplier
2.   No close substitutes
3.   VERY high barriers of entry
4.   Control price

  *Rare! Anything that is profitable attracts
                     substitutes!
 *Generally illegal due to antitrust legislation
Types of Legal Monopolies
1. Natural Monopoly: 1 seller is most
   efficient due to economies of scale
  – Cable, electricity, water, etc


2. Geographic Monopoly: limited by
   location
  •   Only grocery store in town
  •   Fewer due to internet
Other types…
3. Technological monopoly: new
   products gain patent become sole
   owners of the technology

3. Gov. Monopoly: when gov is sole
   supplier of product
  •   Public utilities: water, roads, sewer
 Cell Phone Service Providers!
• TMobile
          S&D #32: Is this a legal?
•   AT&T is attempting to buy T-Mobile. If AT&T
    is able to do this, how much of the cell phone
    service market will it control?
•   Who has the power to stop the merger?
•   What are 2 reasons why they should merge?
•   Who has the worst cell phone service?
•   What could happen to price if this occurs?
    What happened in Canada?
•   What does this article suggest that Obama
    should do?
•   Do you think this merger will improve service
    or price?

				
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posted:9/12/2012
language:English
pages:6