Question

Find a UNIQUE example of a monopoly industry (one that has not already been used in...

Find a UNIQUE example of a monopoly industry (one that has not already been used in the book or power points). Discuss the characteristics that you believe make this industry a monopoly industry. Explain in detail. Does this firm have market power? Explain. Should monopolies be regulated by the U.S. Government? Why or why not?

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Answer #1

Monopoly is a form of market in which there exist only a single seller who sold goods which does not have close substitutes. There is barrier in the entry of new firms. Under monopoly, the firm is a price maker because it can fix the price for its product. It has free control over the supply of the product. A monopolist firm faces a market demand curve which is negatively sloped. It means that the firm will have to reduce the price to increase its sale. Demand curve of a firm under monopoly is less elastic because the product has no close substitutes.

Mediacom and Comcast are the examples of monopoly which are under the control of US government.

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