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Monopoly: a Game or Reality?

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MONOPOLY: A GAME OR REALITY A monopoly is a market structure in which there is a single firm selling a product with no close substitutes. The general perception is that corporations who monopolize industries are "fiends" who practices profit maximization means and prevent competition from existing and therefore preventing gains in productivity, efficiency, and economic development from arising. However, this assumption does not always hold true. Although monopolies are able to dictate the market price of their products and maximize on corporate gains, they often pursue other objectives such as maximizing sales, public image, and general welfare and consumer satisfaction. All of which are avenues through which the firm may maximize profits in the future. ...read more.


As a result, a lot of citizens will be angry and civil unrest may arise. This scenario gives us a reason to support a monopoly market structure. Another reason to support the existence of monopolies in our society can, again, be exemplified in the example of Toronto's Transit System. If the transit industry were to become a monopolistic competition than the new breed of companies, which will spring up, will add to our current supply of transits and thus a surplus of supply will result. Consequently the fares of transportation will be lowered to meet equilibrium. Moreover, the additions of new transits in Toronto will result in the production of new tickets by each of the respective mother companies. ...read more.


Yet, that is not to say that monopolies that are successful don't try to gain in productivity, efficiency, and economic development because a true businessman knows that no matter how "fine" his product is, there will always be room for improvement. It is also evident that to stay on top of the "game", the businessman has to find a way to enhance his products to the ever-changing needs of his customers and those that are potential buyers. With this final example, we can conclude that monopolies are, for the most part, not always the profit maximizing "fiend" that they are perceived to be and that they (monopolies) are a very important part of our economy (and society) because it adds stability to our lives and gives us reassurance in an ever-changing world. Khuong Ly 11G, Period C February 2nd, 2001 1 ...read more.

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