Talk:Monopoly

Murray Rothbard

The economic incentives for a monoply make it likely that they will sell a lower quantity of goods at a higher price than firms would in a purely competitive market in order to secure monopoly profits Removed:

though Murray Rothbard has shown (Man, Economy, and State, chapter 10) that this is only possible in the case of a government-granted monopoly.

That doesn't make sense to me. What about natural monopolies like the telephone company or railroads. I would expect that they would be able to sustainably charge above competative rates because of the high cost to enter the industry. Please exaplain more if you wish to add this to the article. Thanks. Jrincayc 02:04, 29 Apr 2004 (UTC)

To claim point blank that Rothbard has shown this is certainly POV, but it is perhaps worth mentioning Rothbard's take (and the Austrian School's take more broadly) on the nature of competition and monopoly. The argument goes something like this: government-granted monopolies are able to act somewhat as the classical analysis suggests that they would, because the law forcibly prohibits any competitors from entering the market (and the monopolists themselves don't have to foot the bill for squashing any attempts at trading through the black market). But "natural monopolies," they argue, face "virtual competition" even if they do not face actual competition: specifically, they have to set their quantity and price (and engage in entrepreneurial activities) with the expectation that the closer they charge to classical monopoly prices rather than equilibrium prices, and the less they invest in entrepreneurship and research, the more of an incentive and an opportunity they create for entrepreneurs to enter the market to compete with them. (They'd also point out, quite rightly, that heavily subsidized and regulated industries such as the railroad and telephone infrastructures are not the best case studies in the action of "natural" monopolists....) Radgeek 19:49, 17 Jul 2004 (UTC)

Historical Examples

• Why isn't Standard Oil listed here as one of the historical examples?

I agree, the John D. Rockefeller case is a prime example of monopolies. He used his power to put other gas companies out of business for his own financial gain. He was found guilty for the case, and was a very large part in the time and even today, as we see gas prices fluctuating rapidly. -airtrixxx1080

Effects

Could someone please create a section focusing on the effects of a monopoly? Some are stated, but some are omitted.

For example, I read an academic article in which the author compared a monopoly in software is similar to one in biology. He used this to argue how badly Windows software suffers from viruses.

Also, monopolies do not allow consumers control. In Colorado, the End User Standards is a policy that requires State works to use Microsoft Office because it is the de facto standard. In a sense, their decision is controlled by the monopoly and the vendor, but the decision should be made without these external pressures.

I am sure there are more effects to a monopoly.

Here is a decent article that goes into more depth on the effects (including benefits and bad things): http://www.bellevuelinux.org/monopoly.html

That Biology reference is just amazing. Never thought of it that way. Great stuff.

-G

Not sure about accuracy

The article mentions that Sprint and MCI were more efficient than AT&T and attributes this to the break up of the old AT&T into baby bells. This efficiency claim needs to be supported with data. As far as i am concerned the market share that Sprint and MCI had gained were results of the decisions of the management to engage in the price war. This, a bad move from the standpoint of the business, was an effective reduction of the long-term phone rates for the consumers.

A monopoly market can have an equilibrium...

Changing this... "Deadweight loss is the cost to society because the market is not in equilibrium, it is inefficient." to this... "Deadweight loss is the cost to society because it is inefficient." Rationale... the former runs counter to my understanding.2001:4450:46C1:CC00:2439:205D:EF44:FD29 (talk) 03:29, 16 August 2023 (UTC)