Question

Why today’s dominant firms, borderline monopolies, have the strong competitive position they currently possess? Use some examples to support the answer

Answer 1

Monopoly firm or dominant firms are those in which a single company or group owns or nearly owns all of the market for a given type of product or service. monopoly or dominant forms are quite profitable.

reasons for these firms to have such strong competitve positions:

1. when government grant a company exclusive right provide good or service.

example: the dutch east india company was given exclusive trading previlege with colonial possession under merchentilist economic policy.

2. nationalization: when government itself takes control over a business or industry.

example: government in india has monopoly over railways. and united states postal service is another example of monopoly of govt in US

3. when you have copyright or patent , intellectual property. the creator of that property are given monopoly power over things like ideas, concepts, designs , storyline and songs and so on.

example: the creator of a drug can get a patent over it and market it and that gives only him the right to sell that drug.

4. when you have access to scarce resources or natural resources is another way you can have monopoly

example: water service and electricity

5. merger and aquisition is also another way of creating dominance.