Problem

Monopolies


Experimental visualization of narrower problems
Other Names:
Captive markets
Duopoly
Nature:

Monopolies are large economic associations, such as cartels, syndicates, trusts, or concerns, which are owned by individuals, groups, or shareholders and which control industries, markets, or entire economies through a high concentration of capital and production. Their aim is to deny other producers the opportunity to compete. Their domination of the economy is the basis for their influence on all spheres of life. A monopoly may be granted by the state for certain purposes or may be acquired through the normal processes of business competition. In present day economics, a monopoly is presumed to exist when one firm has one third of the market, but the situation is considered to be more serious if three or four big firms have over half the market.

Claim:

Monopolies can retard progress, in the technical sphere and in living standards, if it threatens profits. A monopoly economy is 'the exact opposite of free competition' (Lenin).

Counter Claim:

Natural monopolies exist where the economies of scale make it very difficult or impossible for market entry to take place and a monopoly by a single supplier is the most efficient solution. Typically such natural monopolies include infrastructure or utility industries based upon networks such as electricity, water, gas, roads, railways, harbours and airports. However, a distinction should be made between those core activities of a natural monopolist where such economies of scale really exist and associated activities over which it has acquired a monopoly because of regulatory entry barriers. In many developing and other countries, even where market entry might be possible, there may be a shortage of enterprises able and willing to compete in these areas.

Broader Problems:
Economic dictatorship
Values:
Monopoly
Problem Type:
C: Cross-sectoral problems
Related UN Sustainable Development Goals:
GOAL 10: Reduced Inequality
Date of last update
16.04.2019 – 16:41 CEST