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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