Referat English 2nd Homework 08 11 2003 MONOPOLY Historically, a monopoly was a legally protected special privilege, to provide a specified product or service. The protection was against the competition of others. Sometimes the government itself would provide the product or service. Other times a private person or company would provide it. In either event, the supplier was comforted by the government-issued guarantee, that no one else would be permitted provide that particular good or service. Over time, consumers came to question monopolies, because monopolists, knowing that there was no threat of competition, were customarily arrogant and, more often than not, provided a shoddy product. Monopolies do not always cause very high prices. Prices tend to be higher with a monopoly than without, but the laws of economics still apply to monopolies. The purpose of monopolies is to maximize profits, not prices, and they are rarely the same thing. For example, if someone were to have a monopoly on motorcycles, he could try to sell them at 50,000 each, but no one would buy them when they could buy cars at the same price. Even if he were to take a 48,000 profit on each vehicle, his total profit would remain low due to the low level of turnover. However by selling them at 5,000 each, his profit per bike may be much less, but the turnover would be higher, as he could directly compete in the car market. Consequently the overall profit is likely to be higher. There is almost no such thing as a ...
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