Question

Describe the difference between a near-monopoly and a regulated monopoly and provide real world examples of each.

Answer 1

Regulated monopoly occurs when government impose regulations on a firm who is sole producer of a good for which there are no close substitutes in the market. For example: Public utilities such as water, gas, electric, cable TV, and local telephone service companies. On contrary near monopoly occurs when a single firm has the bulk of sales in a certain market. For example: Brannock Device Company (shoe sizing devices), Wham-o (Frisbees), Central Microprocessors (Intel), DeBeers diamond syndicate, and First Data Resources (Western Union)