Question

Give an example of a real-world monopoly or a firm close to being a monopoly. Discuss what you think is the source(s) of its market power. For instance, do you think this is an example of a cost-based monopoly or is there some other explanation, such as advertising or network effects, etc.

Answer 1

Answer - The example of real world momopoly is Indian Railways. The Indian railways are the monopoly created by the government in which the government has restricted the entry of the private firm. It is considered a public good and absence of private sector makes it effiicient. Here the tender are alloted by the government and only those who gain the license from government are able to participate for the other supplies. Hence this is a government monopoly and the resources are solely owned and managed by government. There are no competitors or substitutes in market.