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Oligopoly In Australia

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Monopolies, Duopoly and Oligopolies in Australia
The issue of the monopolies, duopoly and oligopolies in Australia. In this article is connected with this issue. Monopoly is oldest trick in the economics textbook to maximize profits than annihilating competitors and creating monopolies. Due to the monopolies, duopoly and oligopolies in bank interest rates, grocery prices, petrol prices, and telecommunications. Consumers are suffering due to price hike. There is lack of competition in the market. There is monopoly of the TELSTRA in telecommunications network.
There is the cosy duopoly between the supermarket giants Coles and Woolworths. The petrol retailers and banks are excellent examples of the oligopolistic markets. Monopoly and oligopolistic structure has allowed sellers to become price makers. The problem of monopoly is that the products are produced in the fewer amounts because the prices are high enough so that the consumer cannot use them in the amount they like. It’s the job of the government to control the monopoly. It does this by setting the price Telstra charges the competitors. It can also control by taking control of the …show more content…

Antitrust laws and regulations are placed to discourage monopolistic operations – protecting customers, keeping out practices that limit trade and ensuring a marketplace remains open and spirited. (Investopedia, 2017) there are many cases in this news article like monopoly of the Telstra . Telstra is considered to have a near monopoly over telecommunications infrastructure; Telstra owns the main copper wire network used to transmit telephone calls and internet services. So the competitors have to buy from the them allowing them to control the price as they

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Some of the ways Monopolies because monopolies were through both horizontal and vertical integration, These two processes were the foundation of Industrial businesses like the Standard oil company led by Rockefeller and Carnegie steel, it allowed these power houses to control the amount of competition they had and how much it cost. These companies would have the reduced processing price because they set the price then sold it at a cheaper price, putting other businesses in shambles, An example of this is in (Doc H). This apparent genius of a process made it so people could only buy their product from them, it did allow for them to fix prices for items like food, fuel.(Doc A) this did allow for a sort of comfortable lifestyle that was defined as American consumerism. Through corporations like sears in the 1870s people were able to buy luxuries through this new affordable lifestyle. (Doc I).

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An act called The Sherman Antitrust Act which got passed by Congress in 1890. The Sherman Antitrust Act authorized the Federal Government to dissolve the monopolies and give out penalties for people found guilty of trying to make monopolies. For more than a decade the Sherman Antitrust Act was rarely used against industrial monopolies and not successful. The reason why it wasn’t very successful is that the companies would find loopholes and say the act was very understandable. President William McKinley launched the trust-busting era in 1898 which started really pushing to stop monopolies.

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Monopolies have complete control of the prices of their products and set the prices for the rest of the market, meaning if you need their product then you must pay the prices they want (p 117). What I didn’t know before reading this was that a monopsony was even a thing. A monopsony is the opposite of a monopoly where there is only one buyer for a certain item, giving them the power to demand almost any price they want (p 125). The last big player is the scary unions. Unions try to make the working conditions better for the employees which costs the company more than without the union, as well as union fees and other expenses they build up (p 123).

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This is evident in the simple supply and demand graph; as price goes up, supply will increase as more suppliers will be willing to supply at a high price, but the demand will decrease due to the high price, causing a surplus of products. A real life example would be the milk industry in the United States, where governments put a price floor above the equilibrium price to support the suppliers, causing a great surplus of dairy products. Another example is the San Francisco Earthquake in 1987, after the disaster the demand for bottled water increased drastically, causing a right shift of the demand curve in the market of water, however the supply of bottled water also decreased due to damaged pipes, therefore the price of bottled water increased. Many other suppliers may sell bottled water at that time with a very high price, this is called price gouging. High prices often does two things that benefits the economy, one is that it encourages the consumer to conserve the product and not waste it, the other is that it encourages suppliers to supply when a product is

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This also causes involving price-fixing and market-division arrangements. It usually involves the private parties and the government which would also be the Department of Justice or the Federal Trade Commission. This is a firm has done something anti-competitive in order to stay ahead in the game or stay ahead in the monopoly. Monopolies without any anti-competitive behavior aren’t usually illegal. An example of these cases was in 1911 and the Supreme Court ruled abuse on John Rocketfeller's Standard Oil Co. because they had abused its monopoly power to keep other companies from going against it and it also divided into thirty-four separate companies.

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Monopolies in the 1900’s had immense powers in the market, and were able to have complete control because they had such power. A monopoly is the “exclusive control of commodity, market or means of production” where the “power is concentrated in the hands of a select few” (Beattie). While monopolies do get jobs done and inquire a large amount of money, their success it at the expense of the people and the power they have obtained is abused. They started off liked by small businesses because it helped with shipping costs, but eventually monopolies became too powerful. They are more hurtful to the public than helpful, and the benefits they gain from being a monopoly hurts the public, making them a collective dilemma.

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Government policies and antitrust laws are effective tools against both monopoly and oligopoly in markets. They encourage competition, level the playing field for firms, and protect consumers from exploitation and unfair pricing. Antitrust laws, for example, prohibit corporations from restricting competition and demand that all firms competing in a market are provided with equal opportunities. They also prevent the formation of cartels, collusive agreements, and other forms of anti-competitive practices. Governments can also employ antitrust laws to block mergers and acquisitions that could create a monopoly or oligopoly.

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Furthermore, the monopolies got rid of the competition so there was no competitive price point. This was not fair for the commoner because the businesses could change the cost of their products and people would have to pay what they charged. The United States has tried to remove all of the monopolies starting with President Theodore Roosevelt. Today there are practically no monopolies in the United States, but in two-thousand four Microsoft was sued for a monopoly of their product Microsoft Word, this was a very rare

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The oligopoly market is set up in a way so that competitors can survive because each is unique and there are so few competitors that they are virtually indispensable even if some ethics atrocity

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This market usually exists when there is only one firm in the sector/industry. A monopoly usually has no close substitutes. For example: a local electricity company, or a railway service in a city. In order for these firms to be able to maintain their monopoly

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Furthermore, customers may find lower prices or higher discounts with a small number of firms in the oligopolistic market. The others will also cut prices to prevent losing their market share when a business started to cut down its price. Firms might have to sacrifice some profits in order to keep customers or reduce the rivals while lower prices to benefit consumers. For example, customers can find discounted air fares which allow them to enjoy the best flight deals with Air Asia.

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This type of market can be seen as being imperfect (where as a monopoly and competitive markets can be seen as being perfect). There are only a few sellers who dominate this type of market, all of which sell similar goods- an example being supermarkets, which are dominated by Tesco, Sainsburys and ASDA. All of these firms could be seen as being price makers, therefore any action by one of the firms can affect the levels of profits for all the other firms operating in that market. Firms operating in this market would be able to profit maximize if they tried to act like a monopoly market structure. Although, this may involve collusion which is seen as becoming efficient, but antitrust laws are set in place to prevent this from happening.

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