• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Using 'Real World' examples, illustrate both some of the potential benefits of monopolies and explain how monopoly firms may be able to engage in price discrimination practices.

Extracts from this document...


Christopher Raw, P02327260, Bus. Env, Corp 1111, BH 3.6, A. Sharhim Using 'Real World' examples, illustrate both some of the potential benefits of monopolies and explain how monopoly firms may be able to engage in price discrimination practices. A monopolistic market or company is one where there is non existent competition. There is one leading market domineer that is producing and supplying the entire market. In a monopolistic market the company in question can determine prices or the amount of products sold to work in their advantage. The power of a monopoly company is that it can completely dominate a particular market subject to whether or not there are existing or up and coming substitutes. By this what is meant is that there could well be a substitute for the monopolist's product. An example of this would be old public sector companies like British Rail. They controlled the entire rail travel market; however there were always alternative forms of travel like coach or air travel. ...read more.


First, the company must know its customers and know that they have different demands to that of other people. This may be the travel of commuters into the city for work. The company may see them as a priority customer as they will use there service everyday during the mornings. The travel company may decide that it could price discriminate against the commuters by increasing the price during the mornings. The commuters will still pay the higher prices because it is imperative that they arrive on time for work. This enables the company to segregate its customers through cheaper prices during the afternoon period rather than the busy morning period. For all of this to happen the company must be of a monopolistic nature. An example of a monopolistic company or group of companies is OPEC. This is the Organisation of Petroleum Exporting Countries. These are a group of producers that act as a unit to control the supply t the market of petroleum based substances (e.g. ...read more.


An example of this is the competition of Microsoft and Apple Macintosh. Microsoft have revolutionised the computer software and hardware industry over the past two decades. It now has over 90% of all computers in the USA using a Microsoft Windows based program. This significantly suggests that it is indeed a monopolistic firm. By doing this it is allowed to charge premium prices on the market for its products such as Microsoft Office. It now has the majority of other software such as games and other programs having to be compatible to run with Microsoft Windows. The world has seen many monopolies before, mostly on national or local level, but it is probably safe to say that Microsoft has easily become the biggest commercial monopoly because of its worldwide dominance. Overall, many monopolies have used the advantage of price discrimination against the consumer. However they can only exploit the price through knowing there customers, e.g. Virgin trains, Rail track, etc. There is an increasing rate in monopolistic competition that could increase the competition through the emergence of alternative forms of product. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. The Nature of Macroeconomics

    human resources * Labour = large, well trained labour force then high productivity * Quantity = size of workforce (natural increase and net immigrations), age distribution (working age, young & old), participation rate (proportion of working age in work or seeking)

  2. Critically evaluate the perceived competitive starategies of the five clothing retail outlets, namely Edgars, ...

    measurement for fabrics from square meters to kgs makes it difficult to directly compare imports of fabrics during 1995 and 1996 with previous years. It appears that imports of yarns stabilized during 1996, being slightly higher than in 1995. However, imports of yarns under rebate of duty increased.

  1. Factors that influence the Price of Houses.

    This is sometimes called a contraction in supply. This is a supply and demand diagram which shows how an equilibrium market price is determined. Graph showing the Equilibrium market price The equilibrium price is the price of a good or service when the quantity demanded is equal to the quantity supplied.

  2. Overview of Intercontinental Hotels Group

    Resorts based on the figures above; and we use the number of hotels that Bass Hotels and Resorts owned in Asia Pacific (178 hotels) divided by total hotel number from the top 10 hotel group in Asia Pacific (821 hotels).

  1. Industry sector: coffee exporting

    Secondly, Ukrainian market is full of instant coffee while it's becoming less popular than coffee beans and ground coffee. As it was mentioned above, the company does not purchase suppliers but purchases coffee directly from manufacturers.

  2. The Ohio Pilot Scholarship Program

    It is about monopoly. The public education industry doesn't reflexively oppose choice when it is only within the public education industry itself. It opposes choice when its monopoly position is threatened. That the public education industry is a monopoly is beyond dispute.

  1. Use tables or graphs to illustrate the price stability performance of Japan.

    This has contradicted Japan's 'bust' advantage. Structural adjustment and creative destruction can prove positive outcomes of negative fluctuations. However, rigid labour and product markets, along with the Japanese keiretsu relationship have hindered the weeding out of inefficient firms. Simultaneously, low interest rates have led to low inflation rates (-0.6% in 2001).

  2. PESTanalysis report for two leisure firms.

    if this was so the impact on the leisure industry would be very detrimental resulting in prices rising and therefore meaning that people may be as spend thrift with their earnings. � The inflation of the country is another factor that could affect the leisure industry.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work