![]() ![]() The government's support is responsible for fixing agricultural prices above competitive levels, for the exclusive ownership of cable television operating systems in any market, for the limit of two cellular telephone services in each market, for the exclusive franchises of public utilities and radio and TV channels, for the single postal service-the list goes on and on. Now, as these individuals have no advantage given them by the law over other persons, it is clear they can only sell more of their commodity than other persons by producing the commodity cheaper and better.Įven today, most important enduring monopolies or near monopolies in the United States rest upon government policies. ![]() If a number of individuals were to unite for the purpose of producing any particular article or commodity, and if they should succeed in selling such article very extensively, and almost solely, such individuals in popular language would be said to have a monopoly. It seems then that the word monopoly was never used in English law, except when there was a royal grant authorizing some one or more persons only to deal in or sell a certain commodity or article. ![]() This belief was well expressed in an excellent article on monopoly in the Penny Cyclopedia (1839 volume 15, page 741): The only monopolies that could persist, they thought, were those that got the government to exclude rivals. If enough rivals enter, their competition will drive prices down and eliminate monopoly power.īefore and during the period of the classical economics (roughly 1776 to 1850), most people believed that this process of monopolies being eroded by new competitors was pervasive. But if the monopoly is in fact more profitable than competitive enterprises, economists expect that other entrepreneurs will enter the business to capture some of the higher returns. Just being a monopoly need not make an enterprise more profitable than other enterprises that face competition: the market may be so small that it barely supports one enterprise. In the absence of government intervention, a monopoly is free to set any price it chooses and will usually set the price that yields the largest possible profit. A monopoly is an enterprise that is the only seller of a good or service. ![]()
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