Identify a company that has a HIGH DEGREE of market power. Specifically identify at least three...

Identify a company that has a HIGH DEGREE of market power. Specifically identify at least three barriers to entry that helped this company become a near monopoly, AND discuss HOW the company came to acquire these barriers to entry. Discuss the consequences of this near monopoly to potential consumer/business buyers for that company's products, and share your opinions on how you believe this firm could/should be regulated to reduce the dead-weight loss to society that is the consequence of all near monopoly industries. If you wish to discuss the benefits that accrue to consumers/businesses/society as a result of your company's product innovation, community service, etc., please feel free to do so.

Expert Solution

Practically there is no example of monopoly as Government regulations dont allow to do so.

However, way back in 2007 , Indian Telecommunications sector saw monopolistic market in terms of customer market shares where Reliance communication enjoyed 76% market share. This was largely due to high cost of spectrum and licenses, high investment and development time and low return on investment for new players which created monopoly for Reliance communication.

Significant capex and multiple levels of funding and lobbying with Government helped Reliance to be the apex leader.

The consequence were nearly positive as the Industry mobile rates fell to all time low and consumers saved decent amount of money with a quality of services.

However over period of time the industry rates rose significantly and quality of service degraded causing dead weight loss as customers switches to newer players in market by 2009 where multiple licenses were opened and new players set in.

Rahul Sunny answered 1 year ago

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