Monopoly vs. oligopoly Essay Example for Free

Monopoly vs. oligopoly EssayMonopolies and Oligopolies argon both trade situations that are manifest in todays economical system. Many people are aware of what a monopoly is and the federal government has even taken steps to make monopolies in the United States illegal. However many are unaware of the many oligopolies operating in the US economic system today. Monopolies and Oligopolies are similar barely not the same, this paper lead explore their similarities and differences, and provide examples of both operating in todays economic system. A monopoly is where one cooperation or business controls the supply of a particular good or service.In monopolies these firms or cooperations not only try to control their respective industry only if go out of their expression to stop other(a)s from entering with heavy restrictions, low price costs, and strategic market placeing plans. The business dictionary defines oligopoly as a a couple of(prenominal) or single supplier effe ctively dogmatic the supply and therefore the price of a particular product or service creating a marketers market. These two situations as defined are similar in the fact that one or few corporations or businesses control the industry and its prices.The consumer is the target in both situations you see where its one or few the consumer is forced to pay the prices set by these controlling corporations. Monopolies and Oligopolies differ in a few ways. In a monopoly you have one cooperation that controls the price and supply of the said product or service, allowing for no competition. Or in other words allowing them to charge consumers whatever price that want and even the hazard to raise prices at any time for no reason thus in a way holding the consumer hostage.In oligopolies there is more than one major player and this allows for some competition in the industry. It to a fault gives consumers more than one option. If one company lowers the price a consumer may choose to elect rical switch companies. The most evident difference as stated above is that monopolies are illegal and mandated by the US government where oligopolies are a common market situation in the United States. A big(p) example of an oligopoly is the US Automobile industry.There are a variety of manufactures to choose from,however most Ameri raises will agree the major players are Ford, General Motors, Honda and Toyota. These major players in the industry control the actions of each other and their competitors. In 2005, GM offered customers employee pricing. This affected the whole industry, Ford, Toyota and other manufacturers were forced to do the same thing or offer something better in order to match the prices of GM to generate profits in the industry. This is a common marketing strategy for automobile manufacturers, the use these tactics to anticipate the next move of their competitors.It also can cause smaller manufacturing companies to go out of business as they can no prolonged co mpete with these large companies. Monopolies are a little harder to explain in todays economic system as they are illegal. However they do still exist, for example utility companies usually turn tail in specific areas where they do not have competition. Consumers are forced to use them do to the region, metropolis or district in which they live. They do not have choices and are required to pay whatever prices their utility company charges for the service.Another good example would be DirecTV, while there are other cable and satellite companies to choose from they offer a service no other company can NFL Package. They are the exclusive owner of this service and football fans have no other option that offers them both game anytime at their fingertips. Most notable in recent history was Microsoft, who was inevitably fined and regulated by the US government in 1998. While monopolies and oligopolies have their similarities and differences the consumer is the target of both and is a vic tim to these multimillion dollar sign corporations and industries.Monopolies even if illegal still exist and operate in todays economy. Oligopolies are in truth prevalent and still allow corporations and businesses to operate at will against the consumer as long as there is competition among the various players in the industry. Whether a monopoly or an oligopoly the consumer has little to no say in the market situation and one or few businesses are allowed to dictate prices and supply of their respective products and services.Works Cited Evans, K.(2013, 02 21). Monopoly Vs. Oligopoly. Retrieved from E How Money http//www. ehow. com/about_4795365_monopoly-vs-oligopoly. html Site contributor. (2013). Dictionary . Com. Retrieved 02 21, 2013, from Dictionary. com http//dictionary. reference. com/ Stein, T. (1999, November 6). Microsoft Ruled a Monopoly / Court finds firm abused its power. Retrieved from SanFransico narrative http//www. sfgate. com/news/article/Microsoft-Ruled-a-Monopo ly-Court-finds-firm-2899336. php.