Overview
As defined by Dr. Bylund, a monopoly is one seller with no other similar options. And I would agree with his statement on the fact that a monopoly itself is not the issue, but rather the power part of it. Monopolies can take many types of forms, and in a lot of countries there are anti-trust laws for any anti-competitive practices that would create a monopoly power that controls market entry. However, as discussed by Dr. Bylund, many monopolies form from innovative ideas that no other company is able to replicate. In my opinion, I would refer to these monopolies as "temporary innovation-based monopolies" because they are only a monopoly until another company can compete with a new innovation. I don't have an issue with a monopoly like this, due to the fact a new innovative product is what everyone should be striving for. And as long as their isn't heavy government regulation over that product which is restricting other companies from competing with the new innovation, then that is the essence of entrepreneurship.
Monopoly Power
Power is a tough word to define, however I have some examples of past and present monopolies that would be great to look at in terms of monopoly powers. Standard Oil Company, the prime example of a monopoly power. Completely reduced the cost of refining and distributing oil to the point where no other oil company (small or large) could compete with them. As a result, they ran or bought every other somewhat competitive oil company in the United States out of business. This is a monopoly power that is bad. Having one company that controls a massive market without a single somewhat large competitor that can enter is diabolical. Another present day example of a monopoly in a common market would be Visa, which charges some crazy rates to their card holders. Visa dominates a 75% market share in the debit card market which allows them to pull off some monopolistic practices, which was the reason why the justice department started a lawsuit signifying this anti-trust issue. It isn't only Visa though, because the other large company in the space is MasterCard, which controls the other 25%. It's like a duo monopoly where they can charge some hardcore rates to consumers because they are the only two companies in the space that can enter it. Not only that, but these two actively work to block out better, faster transfer technology, thus contributing to that anti-competitive power that we see often with monopolies. Standard Oil and these present-day debit card companies are prime examples of monopoly power, ones that we do not want to see.
Temporary Innovation-Based Monopolies
Another form of monopoly is the "Temporary Innovation-Based Monopoly", which is a phrase I created on my own which describes this type of monopoly quite well. Apple with the iPhone for a few years would be a prime example of this. They created a product that no one had ever seen before, and had a massive head start in a brand new market that they had envisioned. This type of monopoly is okay, because they soon had Samsung and other smart phone companies follow to create competition within the space. Obviously, Apple has continually innovated the iPhone and has a brand loyalty like no other, but Samsung and Xiaomi have provided awesome innovations themselves in the market and have built themselves a nice share in the market as well. The difference is, there are ways for other companies and startups to enter this market. Apple did not find ways to restrict every other company from making smart phones and thus did not use monopolistic anti-competitive strategies to keep their dominance in the space. Allowing innovation and competition also keeps growing the market because newer, better technology is continually created.
Closing Remarks
Monopoly itself is not bad, as long as there are no restrictions to enter the market with another innovation to create competition. Sometimes companies have a period where they are the only company in existence with that technology, thus creating a temporary monopoly. Another way monopolies form is through government regulations. Regulations could be a cause of monopolies starting in the first place, but regulations also help breakdown monopolies as well with anti-trust laws. The real power comes from a company controlling entry, and that can be dangerous as if there is no competitors people can start to do some diabolical pricing to products. In a less important market, people have the option to walk away. But in some markets, it's not a want, but a need. Look at medicine for example, sometimes there's only one drug on the entire market that people depend on to survive, and they jack those prices to the moon. Example: Epi-Pen when there was no alternatives for a few years. There was no alternative with that, and in an emergency, someone needs that to live.
