You have learned about monopolies. Describe your opinion about monopolies here in Canada. I have never had a strong opinion on monopolies in Canada. However, I believe that monopolies can stifle innovation, competition, and affect the prices that the consumer has to pay for a product or service. Since we live in a mixed market economy, Canada has very few monopolies such as the health, airspace, and telecommunications industries. Companies within theses industries are notorious for price fixing, lack of innovation, and competition. These problems are prevalent because of the barriers to entry the new players face such government regulation, the cost of doing business, and infrastructure. Overall I believe monopolies are a good and bad …show more content…
When I researched which sectors of the economy are monopolized, I had a lot of mixed feeling about each industry. For example, I like that our health care industry is monopolized by the government because ordinary Canadians pay less for health care and prescription drugs. However, I dislike the monopoly in the telecommunications sector because of the poor customer 's service and quality of the product i.e. network throttling. Although, I believe this type of monopoly is necessar·y to more our network infrastructure forward. I believe that we have too many monopolies in Canada because monopolies give the consumer less choice, lower quality service, and products and services can be more costly to the consumer. In my opinion, a market-based economy with fewer monopolies will benefit the consumer because companies will compete to give you the best deal possible to retain your business. In this environment the consumer will benefit most as a consumer, I …show more content…
The US has a sophisticated banking system that does a good job of allocating resources in productive place for their customers. However, in an area such as investment banking companies can use the deposited money for risky investments such as foreign government and corporate bonds. When these banks lose money on their investments or go out of business, all of the customer 's savings would be gone. Also, in this type of system bankers are more likely to commit fraud such as opening fake accounts vis a vis Wells
Consumers would lose-out from increased competition in the short-run, however in the long-run consumers would ultimately benefit from increased competition. High levels of competition prevent businesses from abusing their market power, such as setting prices above or below what a perfectly competitive market would dictate to be at equilibrium and also encourages businesses to be innovative instead of becoming complacent, relying on consumer’s lack of choices.
Since this debate still rages on, many people argue both sides of the story of the pros and cons. Many would argue that not breaking up monopolies actually increase the competition of companies that are attempting to break into some of the market share that the monopoly already has, more so than the free market that exists now. Proponents of the Sherman Anti-Trust act argue that “absolute power corrupts absolutely” (Martin, 1996) as originally quoted by Baron Acton. The idea that no competition within the business world establishes no risk and reward that is all part of the entrepreneur spirit of the U.S. spirit.
... a loan before the loan is given to the person. Banks need to make sound investments as well. Chances are, the banks are using other people's money to invest in things. Banks should not be allowed to do just anything with money that is not theirs.
... banks in a time where the entire population is in a downfall is not a wise choice.
A monopoly exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it. A monopoly sells a good for which there is no close substitute. The absence of substitutes makes the demand for the good relatively inelastic thereby enabling monopolies to extract positive profits. It is this monopolizing of drug and process patents that has consumer advocates up in arms. The granting of exclusive rights to pharmacuetical companies over clinical a...
Second: The break of monopolies or “trustbusting” began in the late 19th century with President Roosevelt. However, it was the Sherman Act passed by Congress in 1890 that really began dismantled large monopolies. The Sherman Act “was based on the constitutional power of Congress to regulate interstate commerce” (Sherman Anti-Trust Act (1890). This act helped dismantle many of the monopolies that had been formed by companies’ trusts such as Northern Securities Company, Standard Oil and the American Tobacco Company. These companies had shareholders put their shares into one trust so the company could control “jointly managed” businesses and keep their prices low. This gave little competition to the major monopolies as other smaller companies could not stay in business and have such low prices. With the help of the courts monopolies continue to be kept at bay and competition continues to be encouraged within industries today.
Governments regulate businesses when market failure seems to arise and occur and to control natural monopolies, control negative externalities, and to achieve social goals among other reasons. Setting government regulations on natural monopolies is important because if not regulated, then these natural monopolies could restrict output and raise prices for consumers. It is important to regulate natural monopolies because they don’t have any competition to drive down the price of the product they are selling. Therefore, with no competition, they can control the output and the price of the product at whatever they deem necessary. With regulations the government keeps it fair both for the consumer and producer. It’s also important for government
The government also plays a major role in determining the level of domestic competition. In the past, the Canadian government had not been supportive to introduce rivalries in its domestic industries. There had not been any clear and well defined competition policies; there were however, numerous policies enforcing tariffs for imported products that had been protecting domestic firms from competition from abroad. Although some can argue that such protectionism was necessary in the starting phase of an industry, but Canada has still been maintaining some of these protection policies even today for well developed industries such as the cable and electricity industries. These protective policies do not promote domestic rivalries and therefore lead to a lack of productivity gain that can be achieved through competition. Although many of these protective policies are now non-existent anymore, what these policies had d...
Growing up, Monopoly was one of my favorite games to play. Determined to win, I even read a book on strategies to win Monopoly. While reading this book, a number caught my eye: it was the percentage of landing on a certain space. How did the book calculate these numbers? For example, how would I find the probability of landing on Boardwalk? This caused me to think some more about the probability behind Monopoly. If I were to take a particular snapshot of the game at a particular point, how would I calculate the probability of landing on a space after 1 turn, 2 turn, or 3 turns? In this investigation, I want to find out the probability of landing on a space after 1 turn, 2 turn, or 3 turns for one player.
The deposit insurance fund provides security to the depositors against insolvency risk, however, it also promotes riskier behavior by insured banks – a form of moral hazard. Economic theory suggests that because insured banks have a sense of security provided by the deposit insurance, they will take on more risk by loaning out more of its deposits to try to expand operations and increase profits. This reckless behavior of the insured banks increases probability of bank exit during economic downturns. This research seeks to test whether the theory stands true by looking specifically into the banking operations in Oklahoma in the early
The state of limited competition, in which a market is shared by a small number of producers, is known as an oligopoly. Many Canadians can relate to the power trio of Rogers, Bell and TELUS as a perfect example of oligopoly as they own an accumulated 92% of the entire wireless market. There are fewer companies in this market; every decision made by each company has a strong impact on Canadian consumers. Judging from many consumer complaints, they feel forced to choose from these three companies because they are the only companies with consistent, wide ranged service. Many complaints include lack of service and overly expensive bills. Therefore, the oligopoly of the Big 3 Telecoms are a definite disadvantage for consumers because their influence
The United States government was reinvesting depositors’ money into government securities, not the local communities in which the deposits were made. The violation of this directive constricted the money supply, and it hindered banks from normal operating measures. The problems caused by the distortions that were introduced into the economy that affected the banks, took a toll on the newly introduced postal banking system during the Depression. The inflexibility of the postal savings system ultimately led to its failure as a financial institution, which ultimately explains its short lifespan of only 56 years (O’Hara and Easley, 753). The system did not provide any flexibility to the changing economic states, and in doing so, it became the primary competitor to private financial institutions during the economic turmoil of the 1930s.
With there being several firms for 3 of the markets, the consumer benefits as they can find the cheapest producer, resulting in the producer being at a disadvantage as they could loose business. In a perfect competition market, the firm is unable to choose the price whereas in an oligopoly the price is chosen by the firm this is beneficial for the producer as it increases their profit margins. However, this is harmful for consumers as they will have to pay the higher prices.
Monopolies have a tendency to be bad for the economy. Granted, there are some that are a necessity of life such as natural and legal monopolies. However, the article I have chosen to review is “America’s Monopolies are Holding Back the Economy (Lynn, 2017)” and the name speaks for itself.
America is a capitalist society. It should come to a surprise when we live like this daily. We work for profit. We’ll buy either for pleasure or to sell later for profit. It should come to no surprise that our food is made the same way because we are what we eat. We are capitalist that eat a capitalist meal. So we must question our politics. Is our government system to blame for accepting and encouraging monopolies?