MARKET STRUCTURES

The De Beers company had a monopoly on the diamond industry, allowing them to set prices regardless of demand.

Monopoly

monopoly
/məˈnäpəlē/
noun

  1. when one seller makes a product for which there are no good substitutes."De Beers wanted to protect their monopoly on the diamond industry"

Advantages:

  • Larger income means that the company can invest more in research and may lower the price of their product in the long term
  • If one company doesn't have to compete against others within a country, it can work on developing enough to be able to compete in the international marketplace.
  • Sometimes monopolies are just the most efficient way, such as in a natural monopoly.

Disadvantages:

  • Monopolies are very susceptible to corruption. When there is no competition, then the consumer can't voice their opinion through money about what they want from a product.
  • Can be inefficient because of a lack of need to improve.

Monopolistic Competition

A market structure where many sellers offer products that are similar but not perfect substitutes. A good example of this is the restaurant business. In a food court, all the restaurants are selling food, but they all have a monopoly on the type of food they are selling, whether it be Chinese, Italian, fast food, or doughnuts. While they are all consumable, they are not exactly substitute-able, so consumer choice is still in play.
Below is a video from Khan Academy detailing the effects of Monopolistic Competition and Economic Profit.

Oligopoly

oligopoly
/äləˈɡäpəlē/
noun

  1. In an oligopoly, only a few large companies sell a similar product. The image below shows how the majority a food available is all owned by just a few large companies.

Types of Monopolies

Natural Monopoly: These form because having one company making a a product lowers the price of the commodity because it is more efficient. This relates to...

Government Monopoly: Which is when the government either has control over a product or only authorizes one company to supply this product. The biggest example of a government monopoly, which also has traits from a natural monopoly because it is the most cost effective way to do things, is utilities such as tap water and electricity.

Public utilities such as tap water and electricity are government monopolies

Geographic Monopoly: Is when a company has a monopoly over a certain geographical area because there is no other companies that make a similar product within a certain radius, so people are forced to use one company's services. This is more common in rural areas where there may be only one large grocery store in the general vicinity.

Technological Monopoly: Is when a company or person has complete control and use of a technology involved in the production of a product. This is usually secured by having a patent on this technology or process, which allows them to have full rights for a certain period of time.

Polaroid had a patent for the one-minute photo developing technology, and made a monopoly based on this.

Sources

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2 years ago
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Love the layout and design with the sections separate by the thin pics, and then the definitions. Great inclusion of videos and pictures to explain. The bullets themselves just feel a little sparse on information between all the pictures.

2 years ago
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Good use of the video and pictures. Pretty solid and organized information provided on each structure.

2 years ago
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Very organized, however, I think that you should add bulleted advantages/disadvantages to the other structures as well.

2 years ago
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Shiflett

2 years ago
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I thought your information was very in depth and i like the use of helpful pictures. -Philip Rodriguez

2 years ago
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I liked the information and the format of the entire website, however I think that you should have either did an advantage/disadvantage bullet point for each section or to just take it out.

2 years ago
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I love how you put in very informative images and videos. The format is very easy to read and your webpage looks astounding! Great job!

2 years ago
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I really like the graphic of the diamonds. I also like that you included how to pronounce monopoly and oligopoly, I needed that. I thought the chart with all the different oligopolies was really informative. Good background and color scheme. 😊

2 years ago
0

this looks great! and you have a video hyperlinked and everything thats awesome!

2 years ago
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This looks amazing. I love the general layout and color scheme. The information went in depth as well. Good job