Monopoly(no, not the game!)

The natural progression from my thread based on Perfect Competition we have the other extreme: Monopoly.

A monopoly according to Wiktionary is:

monopoly (plural monopolies)

1.A situation in which solely one company exclusively provides a particular product or service, dominating that market and generally exerting powerful control over it.
2.An exclusive control over the trade or manufacture of a commodity
3.A company dominating a market in one of the the above manners.

This is the equilibrium graph:



MC=Marginal Cost

AC=Average Cost

AR=Average Revenue

MR=Marginal Revenue

Pm-AC=SNP

Qm=Quantity produced

Pm=Price sold

Any questions?

I've bumped this thread so that we can discuss monopolies. We can widen the discussion from the theoretical to the real-life and discuss monopolies which exist in real life. We can also comment on how monopoly as a phenomenon has receded from almost all walks of economic life.

Dublin Bus could be an example - except I don't think public services really are monopolies in the true sense. I think that monopolies are when a profit making enterprise has no competition.

It is a relation to a cartel, which is a group of profit making companies who work together to fix buying and selling prices.

I was looking at sites on private education in England for johnfas's thread and it turned out that the toffs schools in England - Eton, and the whole lot, had been done for forming a price fixing cartel. Who'd have thunk it.

cactus flower wrote:

Dublin Bus could be an example - except I don't think public services really are monopolies in the true sense. I think that monopolies are when a profit making enterprise has no competition.

It is a relation to a cartel, which is a group of profit making companies who work together to fix buying and selling prices.

I was looking at sites on private education in England for johnfas's thread and it turned out that the toffs schools in England - Eton, and the whole lot, had been done for forming a price fixing cartel. Who'd have thunk it.

Yeah. Cartels are marked under the "Oligarchies" section of economics. Dublin Bus and ESB in the residential market would be among the purest monopolies remaining in Ireland.

Is Iarnrod Eireann a monopoly too? They have no choice though - it's just not possible to build a competitive entity.

Dublin Bus - should that be broken as a monopoly?

Well, you probabably read about what Dublin Bus managed to do to Circle Line operating out of Lucan. This debacle is now the subject of an Oireachtas Comittee debate.

Auditor #9 wrote:

Is Iarnrod Eireann a monopoly too? They have no choice though - it's just not possible to build a competitive entity.

It is and it isn't possible to create a competitor to Iarnród Éireann since it would be an un-necessary duplication of services. It'd be wasted investment and create dis-economies of scale.

EvotingMachine0197 wrote:

Well, you probabably read about what Dublin Bus managed to do to Circle Line operating out of Lucan. This debacle is now the subject of an Oireachtas Comittee debate.

I don't know what they did - if you feel like telling us please do but you've given us enough info to google a few articles in the papers.

Well they flooded the route with loads of extra buses and put the guy Paul Moran ? out of business. Just like that. Using taxpayers money no less.

READ ALL ABOUT IT

http://www.circlelinebus.com/

EvotingMachine0197 wrote:

Well they flooded the route with loads of extra buses and put the guy Paul Moran ? out of business. Just like that. Using taxpayers money no less.

READ ALL ABOUT IT

http://www.circlelinebus.com/

Now there's some Oireachtas Committee reports I could read. Did you get a chance to use the service? Oh you don't live there. Dublin Bus don't have music on their buses and I hate the double deckers because I hate heights In serio, I used to get the jitters watching old people going up and down the stairs when the bottom was full and the bus was moving.

Competition means choice of service and people may not choose it just for the money but for other things. Do you think that information could affect the market like the above? For example, people will often support a business if they feel it's going out of business, assuming they know of course. It's my belief that people would support such a service if they had real information. Shouldn't Dublin Bus be obliged to publicise the profits of each of their routes and all that as would their competitors so people could see the difference and choose to support one or the other.

The theory is sound in my view once good information is made public. I sincerely doubt that Dublin Bus isn't making massive profits each year.

Are Oireacthas Comittee debates transcribed? Are they online ? I would love to see the IAA radar one.

EvotingMachine0197 wrote:

Are Oireacthas Comittee debates transcribed? Are they online ? I would love to see the IAA radar one.

Have a look there http://oireachtas.ie/ViewDoc.asp?fn=/home.asp at the left hand side under committees.

If you find anything let us know - I for one could use an education on the 6 different types of committees we have there ...