Monopoly vs. Oligopoly
Monopolies and Oligopolies are both marketing situations that are present in today’s economic system. Many people are aware of what a monopoly is and the federal government has even taken steps to make monopolies in the United States illegal. However many are unaware of the many oligopolies operating in the US economic system today. Monopolies and Oligopolies are similar but not the same, this paper will explore their similarities and differences, and provide examples of both operating in today’s economic system.
A monopoly is where one cooperation or business controls the supply of a particular good or service. In monopolies these firms or cooperation’s not only try to control their respective industry but go out of their way to stop others from entering with heavy restrictions, low price costs, and strategic marketing plans. The business dictionary defines oligopoly as; a few or single supplier effectively controlling the supply and therefore the price of a particular product or service creating a seller’s market. These two situations as defined are similar in the fact that one or few corporations or businesses control the industry and its prices. The consumer is the target in both situations; you see where its one or few the consumer is forced to pay the prices set by these controlling corporations. Monopolies and Oligopolies differ in a few ways. In a monopoly you have one cooperation that controls the price and supply of the said product or service, allowing for no competition. Or in other words allowing them to charge consumers whatever price that want and even the opportunity to raise prices at any time for no reason thus in a way holding the consumer hostage. In oligopolies there is more than one major player and this allows for some competition in the industry. It also gives consumers more than one option. If one company lowers...