S&D #31 :
1. 1 Firm / Supplier
2. No close substitutes
3. VERY high barriers of entry
4. Control price
*Rare! Anything that is profitable attracts
*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
• Only grocery store in town
• Fewer due to internet
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!
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
• Do you think this merger will improve service