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| Topic: |
Business
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| Number of pages / Number of words: |
5 / 1127 |
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This entails looking at traditional models of competition (see Appendix 1). A monopoly is when a market has only one producer. This is the other end of the competition spectrum. The firm in this case is a price maker, as due to little or no competition it can set whatever price it wishes, and is therefore able to achieve supernormal profits (see Appendix 2)...
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However, a disadvantage of a monopoly is that they exploit customers by charging high prices for sometimes poor services, and are also thought to waste resources due to inefficiency.
An example of a company accused of exercising monopoly power is Bill Gates' Microsoft®. Their Windows software is essential for the use of programs such as Word, and can only be purchased from Microsoft due to exclusive trading rights...
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