![]() In this case, the bridge will be competitive, and although expensive, it will certainly be affordable. Is it legal to make a competing bridge, for example? Or perhaps a ferry? For example, a new bridge built between two regions of a country.īut even here, we have to consider the competition that surrounds it. There are examples of natural monopolies, which many people consider as being harmful as they give unfair advantage to a monopolist. The harm of monopolies depends on how they are framed Read More: How to nudge consumers to make greener choices Google is not the dominant search engine because it has a monopoly, but because most consumers like it and the price of their service, and so they are big players in the advertising market. This pressurises competitive monopolists to create innovative products that offer an improvement on what is already on the market, but also drives innovation in terms of their internal processes to keep costs and prices down. Skilled entrepreneurs might create a monopoly by offering good prices and innovation, and this is good for the consumers seeking these products. ![]() So it is also a question of whether the monopolies are competitive, and not just whether they are a monopoly per se. In either case, consumers are well served. My profit will attract competitors, and then I no longer have a monopoly, unless I keep my prices low or my product is so good that it out competes the competition-either in price or innovation. If we assume that I’m not very successful or that my planes aren’t very popular, I will still maintain my monopoly, and lose a lot of money.īut let’s say that my paper plane sales go through the roof. If I start a business selling paper planes in the centre of Copenhagen, I’d have a monopoly as a seller of a unique product. Read More: Consumers are fooled by a product’s colour This is crucial before we can say whether a monopoly is really a problem. We forget, that the answer to the harm caused by monopolies depends on why there is just one provider in the first place. When this happens, we assume that monopolies, where there is only one provider of a unique product, are bad and harm consumers. The problem with this understanding arises when concepts are taken out of context, which often happens in economic theory. If you are not happy with this, then you do not need to use them, and the companies will learn to sell their services by some other means. The price we pay to use services like Facebook is our personal data.
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