Question

The MLBPA represents all major league baseball players. The St. Louis Cardinals have a monopoly on the provision of major league baseball in St. Louis. Explain why this not a bilateral monopoly.

Answer 1

Bilateral Monopoly refers to a situation where there is a single seller as well as single buyer in the market. Now, here the case is not that of bilateral monopoly because: MLBPA represents all major league players which is a monopoly in a sense, but St. Louis Cardinals have monopoly of provision of major league baseballs ONLY in St. Louis. They may be a monopoly in their sole geographical area, but, for MLBPA, they represent only a fraction of major league players out of all the other teams that MLBPA must be representing. Thus, MLBPA is a monopoly, but St. Louis Cardinals is not the only identity as far as transactions with MLBPA is concerned. MLBPA has access to other teams over the entire geography.

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