What's a Monopoly?
A Monopoly is a tabletop game company that controls an entire Market. It sells a good or service with no good substitutes.
Example
If company ABC is an electricity Monopoly in Portugal, for example, it means that only company ABC sells electricity in Portugal.
Consequences
High Prices
If only one company sells a certain good, they can increase its price a lot without having to worry about competition, because there is none!
Market Influence
Monopolies have a lot of bargaining power, meaning they can buy raw materials for cheap, and get better deals when selling to redistributors.
This gives them an even bigger advantage in comparison to other businesses that might try to enter that market.
Moreover, if another company tries to threaten them, they can just use Predatory Pricing in order to drive competition out of business.
Discriminatory Pricing
Finally, Monopolies can discriminate at which price they sell their goods, increasing or decreasing the price they charge for their goods based on gender/ religious beliefs, etc.
Conclusion
While not all Monopolies are bad, as we'll see in the next post, most of them can cause havoc in the Economy, by not having to compete with other businesses!
Do you know of any recent examples of Monopolies leveraging their positions in order to obtain even more power and prevent competition from taking hold?
Thanks for reading!
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Take a look at my last posts, about a couple of Human Psychological quirks: