3. American Telephoneand Telegraph Company (AT&T)2. John D.
Rockefeller’sStandard Oil Company1. Andrew Carnegie’sSteel Company (now U.S. Steel)The most famous monopolies in history:1. Google. They control67% of the web search marketExamples of a Modern Monopoly:· Ultimate advantagefor existing· Huge barriers toentry· One playerCharacteristics of monopoly:The best examples are publicutilities in markets like electricity, water, natural gas and sewage.Natural monopoly – when it ismore cost effective to have one large producer rather than several competingfirmsSource: Mankiw N.
G. – Principles of Microeconomics, 7th Edition (Mankiw’s Principles ofEconomics) – 2014• The production process: Asingle firm can produce output at a lower cost than can a larger number offirms.• Government regulation: Thegovernment gives a single firm the exclusive right to produce some good orservice. • Monopoly resources: A keyresource required for production is owned by a single firm.Monopoly potentially allows companiesto become powerful enough to prevent competitors from entering the marketplace.The fundamental cause of monopoly is barriers to entry: A monopoly remains theonly seller in its market because other firms cannot enter the market andcompete with it.
Barriers to entry, in turn, have three main sources:Basically, in a monopolycompanies are selling a unique product in the market, the seller faces nocompetition, as he is the sole seller of goods with no close substitute.Furthermore, in monopolies companies can set prices for their output based onthe demand and supply of the market(https://economictimes.indiatimes.com/definition/monopoly); thus, a monopoly company is a price maker and competitivecompany is a price taker. Monopoly – is a marketcontrolled by one seller with a good product or service that has no closesubstitutes.