Monopoly

Monopoly 

At&t is a telecommunication company proven to monopolize the western countries. They are strong because they are enforced by the government. However, they have many competitors such as T-Mobile which they accused of increasing competition or in other words; Barriers to Entry. Deutsch Telekom sold off T-Mobile which is because they did not have many spectrum to meet demand. The company was sold to At&t at a price of $39 billion for the fourth largest telecommunication company in United States. They bought the company to expand their cell towers to support the 4G LTE network. This shows that At&t have market power. 

Microsoft operation have been seen through the whole world as the biggest software monopoly. They used tactics such as vendor-lock in, hostile take overs and FUD (Fear, Uncertainty and Doubt) to suffocate their competitors. However hardware vendors such as Dell, HP, Toshiba and Asus does not put their products to the market unless the Microsoft software is pre-installed. This situation is related to a term in economy which is collusion.

The myth of Natural Monopoly 

It's been said that natural monopolies are utilities that have been granted government franchise. 

"Put simply, a natural monopoly is said to occur when production technology, such as relatively high fixed costs, causes long-run average total costs to decline as output expands. In such industries, the theory goes, a single producer will eventually be able to produce at a lower cost than any two other producers, thereby creating a "natural" monopoly. Higher prices will result if more than one producer supplies the market."


Furthermore, competitions or competitors will cause inconvenience to the society. For example if the other company wants to do a same project on the same place with the government franchise, it will create duplication and confusion for the society. Thus creating impossibility for competitors to trade their companies in the market and compete with the "natural monopolies"


Monopoly can be referred to this graph