Monopoly: Difference between revisions

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===Higher prices and reduced output===

Monopolists typically charge higher prices and produce less output than would occur in competitive markets.

:Monopolists typically charge higher prices and produce less output than would occur in competitive markets.

~~===~~Deadweight welfare loss~~===~~

*'''Deadweight welfare loss'''

Reduce output creates a deadweight loss, a reduction in total economic welfare not transferred to any party. This represents the value that could have been created if not for the monopolies restrictions of output.

:*Reduce output creates a deadweight loss, a reduction in total economic welfare not transferred to any party. This represents the value that could have been created if not for the monopolies restrictions of output.

:*Reduced consumer surplus

:*Convert consumer surplus (the difference between what consumers are willing to pay and what they actually pay) into producer profits.

~~===Reduced consumer surplus===~~

*'''Productive inefficiency'''

~~Convert consumer surplus (the difference between what consumers are willing~~ to ~~pay and what they actually pay) into producer profits~~.

:Without pressure, monopolies may lack incentives to:

:*Minimize costs.

:*innovate or improve product quality.

:*Operate at minimum efficient scale.

~~===Productive inefficiency===~~

*'''Potential for abuse of power'''

~~Without pressure, monopolies may lack incentives to:~~

:*Paying suppliers less.

:*Lowering wages for workers.

*~~Minimize costs.~~

:*Influencing political processes through lobbying.

*innovate or improve product quality.

*Operate at minimum efficient scale.

~~===~~Potential for abuse of power~~===~~

*Paying suppliers less.

*Lowering wages for workers.

*Influencing political processes through lobbying.

==Examples==

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*Carnegie Steel Company (1900).<ref>{{Cite web |title=The Founding of U.S. Steel and the Power of Public Opinion |url=https://www.library.hbs.edu/us-steel/exhibition/the-founding-of-u.s.-steel-and-the-power-of-public-opinion |website=Harvard Business School}}</ref>

*De Beers Group:

:Established by Cecil Rhodes in 1888.They have faced numerous allegations throughout its history. He purchased the remaining mines and diamonds from other companies, nearly 85% of the diamond market fell into the hands of Da Beers Group. ~~After 50 year long reign over the diamond market, it~~ began to lose its control in the 1950s when new mines were discovered in other parts of the world. ~~The company is~~ responsible for 30% of diamond sales globally~~. The company has also~~ been accused of limiting the supply of diamonds to manipulate its prices. ~~had 90% market share in 1980 and 29% as of 2022.<ref>{{Cite web |last=Whalley Curwen~~

:Established by Cecil Rhodes in 1888.They have faced numerous allegations throughout its history. He purchased the remaining mines and diamonds from other companies, nearly 85% of the diamond market fell into the hands of Da Beers Group. It began to lose its control in the 1950s when new mines were discovered in other parts of the world. They are responsible for 30% of diamond sales globally and have been accused of limiting the supply of diamonds to manipulate its prices.<ref>{{Cite web |last=Jaganmohan |first=Madhumitha |date=June 26, 2025 |title=Market share of the leading diamond mining companies worldwide in 2023 |url=https://www.statista.com/statistics/585450/market-share-of-diamond-supply-worldwide-by-producer/#:~:text=Market%20share%20of%20the%20leading%20diamond%20producers%20worldwide%202023&text=As%20of%202023%2C%20the%20Russian,global%20diamond%20production%20market%20share.|website=Statista}}</ref>

|first=Jason Peter |date=February 2007 |title=Internationalization andDe-internationalization in the Telecommunications Industry|url=https://scholarship.law.umn.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1235&context=mjlst |website= }}</ref><ref>{{Cite web |last=Jaganmohan |first=Madhumitha |date=June 26, 2025 |title=Market share of the leading diamond mining companies worldwide in 2023 |url=https://www.statista.com/statistics/585450/market-share-of-diamond-supply-worldwide-by-producer/#:~:text=Market%20share%20of%20the%20leading%20diamond%20producers%20worldwide%202023&text=As%20of%202023%2C%20the%20Russian,global%20diamond%20production%20market%20share.|website=Statista}}</ref>

*[[Google]].

*Luxottica.

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*[[Nvidia]] uses its market leader position to mislead consumers and threaten media.

*Standard Oil (1900).

*[[AT&T|The American Telephone and Telegraph Company]] (AT&T) controlled telecommunications in America until 1982.

*[[AT&T|The American Telephone and Telegraph Company]] (AT&T) controlled telecommunications in America until 1982.<ref>{{Cite web |last=Whalley |first=Jason |last2=Curwen |first2=Peter |date=February 2007 |title=Internationalization and De-internationalization in the Telecommunications Industry |url=https://scholarship.law.umn.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1235&context=mjlst |website=scholarship.law.umn.edu}}</ref>

*[[Ticketmaster Entertainment, LLC|Ticketmaster]] is often referred to as a monopoly of live events.

*Tyson Foods.

@@ Line 68: / Line 68: @@
 ===Higher prices and reduced output===
-Monopolists typically charge higher prices and produce less output than would occur in competitive markets.
+:Monopolists typically charge higher prices and produce less output than would occur in competitive markets.
-===Deadweight welfare loss===
+*'''Deadweight welfare loss'''
-Reduce output creates a deadweight loss, a reduction in total economic welfare not transferred to any party. This represents the value that could have been created if not for the monopolies restrictions of output.
+:*Reduce output creates a deadweight loss, a reduction in total economic welfare not transferred to any party. This represents the value that could have been created if not for the monopolies restrictions of output.
+:*Reduced consumer surplus
+:*Convert consumer surplus (the difference between what consumers are willing to pay and what they actually pay) into producer profits.
-===Reduced consumer surplus===
+*'''Productive inefficiency'''
-Convert consumer surplus (the difference between what consumers are willing to pay and what they actually pay) into producer profits.
+:Without pressure, monopolies may lack incentives to:
+:*Minimize costs.
+:*innovate or improve product quality.
+:*Operate at minimum efficient scale.
-===Productive inefficiency===
+*'''Potential for abuse of power'''
-Without pressure, monopolies may lack incentives to:
+:*Paying suppliers less.
+:*Lowering wages for workers.
-*Minimize costs.
+:*Influencing political processes through lobbying.
-*innovate or improve product quality.
-*Operate at minimum efficient scale.
-===Potential for abuse of power===
-*Paying suppliers less.
-*Lowering wages for workers.
-*Influencing political processes through lobbying.
 ==Examples==
@@ Line 95: / Line 92: @@
 *Carnegie Steel Company (1900).<ref>{{Cite web |title=The Founding of U.S. Steel and the Power of Public Opinion |url=https://www.library.hbs.edu/us-steel/exhibition/the-founding-of-u.s.-steel-and-the-power-of-public-opinion |website=Harvard Business School}}</ref>
 *De Beers Group:
-:Established by Cecil Rhodes in 1888.They have faced numerous allegations throughout its history. He purchased the remaining mines and diamonds from other companies, nearly 85% of the diamond market fell into the hands of Da Beers Group. After 50 year long reign over the diamond market, it began to lose its control in the 1950s when new mines were discovered in other parts of the world. The company is responsible for 30% of diamond sales globally. The company has also been accused of limiting the supply of diamonds to manipulate its prices. had 90% market share in 1980 and 29% as of 2022.<ref>{{Cite web |last=Whalley Curwen
+:Established by Cecil Rhodes in 1888.They have faced numerous allegations throughout its history. He purchased the remaining mines and diamonds from other companies, nearly 85% of the diamond market fell into the hands of Da Beers Group. It began to lose its control in the 1950s when new mines were discovered in other parts of the world. They are responsible for 30% of diamond sales globally and have been accused of limiting the supply of diamonds to manipulate its prices.<ref>{{Cite web |last=Jaganmohan |first=Madhumitha |date=June 26, 2025 |title=Market share of the leading diamond mining companies worldwide in 2023 |url=https://www.statista.com/statistics/585450/market-share-of-diamond-supply-worldwide-by-producer/#:~:text=Market%20share%20of%20the%20leading%20diamond%20producers%20worldwide%202023&text=As%20of%202023%2C%20the%20Russian,global%20diamond%20production%20market%20share.|website=Statista}}</ref>
-|first=Jason Peter |date=February 2007 |title=Internationalization andDe-internationalization in the Telecommunications Industry|url=https://scholarship.law.umn.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1235&context=mjlst |website= }}</ref><ref>{{Cite web |last=Jaganmohan |first=Madhumitha |date=June 26, 2025 |title=Market share of the leading diamond mining companies worldwide in 2023 |url=https://www.statista.com/statistics/585450/market-share-of-diamond-supply-worldwide-by-producer/#:~:text=Market%20share%20of%20the%20leading%20diamond%20producers%20worldwide%202023&text=As%20of%202023%2C%20the%20Russian,global%20diamond%20production%20market%20share.|website=Statista}}</ref>
 *[[Google]].
 *Luxottica.
@@ Line 102: / Line 98: @@
 *[[Nvidia]] uses its market leader position to mislead consumers and threaten media.
 *Standard Oil (1900).
-*[[AT&T|The American Telephone and Telegraph Company]] (AT&T) controlled telecommunications in America until 1982.
+*[[AT&T|The American Telephone and Telegraph Company]] (AT&T) controlled telecommunications in America until 1982.<ref>{{Cite web |last=Whalley |first=Jason |last2=Curwen |first2=Peter |date=February 2007 |title=Internationalization and De-internationalization in the Telecommunications Industry |url=https://scholarship.law.umn.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1235&context=mjlst |website=scholarship.law.umn.edu}}</ref>
 *[[Ticketmaster Entertainment, LLC|Ticketmaster]] is often referred to as a monopoly of live events.
 *Tyson Foods.