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From book Microeconomics " Brief Edition" No firm is completely sheltered from...
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Yes, with the caveat that all firms are competing on a truly level playing field, that not one firm is given some "special" advantage by government. In a level market, there may be consolidation of firms and they may dominate the market (as did Microsoft) but they cannot completely control it. Monopolies only come about by coercion, which is not allowed in a free market.
Posted by enotechris on January 28, 2012 at 3:38 AM (Answer #2)
High School Teacher
I have to agree with enotechris. Based upon the "fact" that no firm is "sheltered" from all rivals, no one company can exist as a monopoly. A monopoly can only exist if no rivals exist. Outside of that fact, monopolies are illegal.
Posted by literaturenerd on January 28, 2012 at 4:32 AM (Answer #3)
At one point, utilities companies had government authorized monopolies in given areas that were "assigned" by federal regulation. This created whole monopolies in those areas though, since they were federally regulated monopolies, they wouldn't be called "pure" meaning created by market conditions. Federal deregulation of the utilities industry opened the industry to many more options and to the failure or partial failure of some utilities, such as Pacific Gas & Electric, for example.
Posted by kplhardison on January 28, 2012 at 4:56 AM (Answer #4)
This is only partly true. Companies that have monopolies on things like cable TV have to compete with firms that provide other kinds of entertainment. However, there are still monopolies that provide necessities like water and electricity. Consumers cannot realistically chose not to buy from those firms.
Posted by pohnpei397 on January 28, 2012 at 5:23 AM (Answer #5)
Middle School Teacher
Posted by litteacher8 on January 31, 2012 at 1:10 PM (Answer #6)
It is not true that pure monopolies do not exist. If the products being manufactured by a firm do not have a substitute and it is necessary for consumers to buy the products they have no option. There are no rivals present here and consumers are left with no choice other than paying what the monopolistic firm demands.
Posted by justaguide on February 13, 2012 at 1:24 PM (Answer #7)
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