• 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...

Introduction

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.

Middle

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.

Conclusion

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

    Focusing is usually achieved by selected a specific market segment with a product or service, or by selecting a specific product or service to offer to a specific market. Example Companies must choose a position, being all things to everyone is a recipe for strategic mediocrity and below average performance,

  2. The Nature of Macroeconomics

    Encourage entrepreneurship and make it easier to start a new business * Develop venture capital markets to aid innovative companies * Adjust monetary policy by waiting for inflation to appear before rasinign interest rates * Increase the pace of deregulation, telecommunications and labour markets * Open financial markets to direct

  1. The Ohio Pilot Scholarship Program

    Ironically, but not surprisingly wh en one reflects on it, place attachments, rather than being dependent on the idea of an idyllic agreeable community, co-exist with intra-neighbourhood divisions. "These neighbourhoods and those who reside within them have been battered by the effects of de-industrialization, environmental degradation and stigmatization.

  2. Industry sector: coffee exporting

    In case the Ukrainian currency rises in price, currency options may used to hedge the currency exchange risks. Currency options allow the company to buy or sell certain amount of hryvnas at a specified price before the specific date. Such an option may help the company to avoid possible results of unfavorable currency movements.

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

    This has reflected weak demand and thus the economic slowdown. These supply-side factors, such as the intensification of global competition and deregulation, have put additional downward pressure on prices. This is contributing to the high debt ratio and subsequent price destruction.

  2. Overview of Intercontinental Hotels Group

    Market share is often associated with profitability. And increase market share could also increase its bargaining power for negotiating with suppliers, distribution channels and customers. While InterContinental is seeking to increase their market share by increasing the sales, sometimes a higher volume sale could also lead to achieve economies of scale and develop a cost advantage.

  1. Toyota Motor Company Limited

    While the Prius hybrid sedan and the RAV4 the small SUV brought their respective classes, the ECHO compact sedan and the Avalon large sedan also received high evaluations. Also, the Prius hybrid car, which was launched in the U.S. market in July 2000, is gaining increasing recognition in North America.

  2. Factors that influence the Price of Houses.

    This causes quantity supplied to increase from Q1 to Q2 which is sometimes called a expansion in supply. A decrease in price from P2 to P1 results in a decrease in quantity supplied from Q2 to Q1 so there is a downward movement along the demand curve.

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