Monopoly A Business With No Competition - 1521 Words

Monopoly Aggressive business owning, buying up your competitors or distributors to maximize a company’s profit, running a business with no competition. Webster’s defines a monopoly as â€Å"exclusive ownership through legal privilege, command of supply, or concerted action† or â€Å"a commodity controlled by one party†. A clear example of what a monopoly is as simple as the board game Monopoly, the game is played exactly what the name says it is, the player becomes a Monopoly, buying up multiple companies that are related in some way to maximize the most money that play can gain from those businesses. Monopolies are quite simple, take for example, there is a local company that makes car parts out of steel, the company purchases the stock steel from a factory that makes steel stock. To make the steel stock the steel stock company buys the raw materials from a mining company. If the car parts company wants to maximize their profits, they simply buy up the st eel company. That way they are not over charged for the steel stock and can get it at a low rate. If the wanted to further maximize their profits they would buy the mining company as well, giving the car parts company total control of where their supply came from and control of the cost, this is called vertical integration. There are two types of monopolies: vertical monopoly and horizontal monopoly. Vertical monopoly or vertical integration is buying up the companies that are a part of the whole manufacturing process. ExamplesShow MoreRelatedMaximizing Profits in Market Structures1287 Words   |  6 Pagesthe higher the competitive the market. Monopolies: Monopolies are a group of business people who act as one. Considerable power is in the company’s ability to set and influence prices. The power is determined by the demand curve cladding the company and with almost no competition. Monopolies have no public ownership. 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