Monopoly Definition – Everything about Monopoly

Monopoly Definition – Everything about Monopoly

Monopoly comes under economics that means a circumstance where only one particular company or organization is providing essential good and service, which is not available to any other service or company. Due to this uniqueness, the company can charge whatever they want (for their goods and service), as they know that the consumers have no other option but to purchase from them only. This type of company or firm is said to be monopolizing the market, or a portion of the market.

Example: Pfizer

An example of monopoly is the pharmaceutical company, Pfizer. The drug named Viagra is invented by them and there is the only supplier of this medicine. Yes, it has many substitutes now, but they were the single supplier of this medicine back in the 80s. Due to this side effect of being the only supplier as well as the inventor of a product, which was in high demand, they started charging very high. This is the clearest case of monopoly.

Anti-Monopoly Ruling

A few financial experts contend that the business sector needs to be accessed only by the government so that the monopoly can be eradicated or controlled; however, it is certainly not possible with the current economic scenario as bigger firms pay a lot of taxes which is used to run the government. Nevertheless, there is an interesting fact that economist who wants to eliminate government interference in private sectors also favors anti-monopoly legal ruling. This clearly states that monopoly is not favored by almost all the financial experts.

Accusations of Monopoly

Accusations of monopolies are very common because whenever it happens, a single corporation gains a large market of share. Just look at the Microsoft; however, their ultimate authority over the operating system as well as internet browser has been dissolved by the Linux and Firefox, respectively. OH! How can we forget about the Mac’s Safari who has a bigger part in eroding the supremacy of Microsoft? Microsoft has been occupied with long awful procedures, recently, over accusations of monopoly.

Bottom Line

Every person has its own standards over the monopoly. In business management school, monopoly is a valuable gem; you don’t have to research, you are alone, you don’t have competitors in the market to worry about, you can predict sales, you can increase the price and so on. Thus, it is not bad; it inspires us to do more, to make something useful, and to be more creative. Monopolies come under the worst light when they get too powerful. If a few people control most of the economy, then it is threatening for a democracy.