Large companies like Apple, Amazon, Alphabet, Microsoft and Walmart they say are monopoly, and they do not allow the existence of a true free market. Well, a lot of people are keen to this belief and they have been expecting the government to break this companies based on anti-trust laws but are this companies for sure monopolies and do they affect the existence of a true free market?
A monopoly is when there is only one supplier in the market for a particular product. In so many cases, a lot of companies have decided to become monopolies by chasing off other competitors either through the help of dumping/predatory pricing, thereby allowing customers to buy from them alone and causing their competitors to go bankrupt. With this type of unhealthy monopolistic market, the monopoly can now move prices the way they want it, to suit their gains. With such monopoly the market will be played by one person. On the other hand, when the companies selling similar product in a free market co-exist, then it is not a monopoly, but like I said before, if Apple, Huawei, Samsung and AT&T are tech companies in the production of phones, then how do a competitive monopoly work in a free market capitalism?
To achieve this, first the company have to make people see a need to buy only its product, either by selling it cheap or by giving customers a reason to patronize them only, at the same time the company has to be supplying the entire demand on the market creating its own niche in the market. You either make your customers believe that you are selling the cheapest or you are selling the best, one of this is needed to prove a monopoly. Also, in a free market capitalism, one way that companies achieve monopoly is by acquiring the raw material or source to produce an end result. Although it isn’t all that possible and usually calls the government’s attention quickly, it is a way to be a monopoly in a free market. One way to become a monopoly in which most of the companies listed above fall under is by creating a new product or service which was not in the market before but if it isn’t handled well, other competitors will take over. In other to remain relevant in the market, the companies need to keep innovating as well as buy every small competitor or perceived competitor. Another way of monopoly is when companies producing the same products decides to reduce production and increase prices just to gain relevance in the market and create an artificial scarcity but this doesn’t last long as another company can always come with a better price thereby breaking the monopoly in the market or one of the companies can as well bridge the terms of agreement and sell at a normal price.
With this, do you say that monopoly is available in a free market, and what do you think will be the solution to this monopoly is there is?