The stakeholders will benefit from the monopoly. The government can ensure more accurate collection of taxes. The government has to monitor only one company supplying the water, electricity, gas, mail, and other needs of the community. The government’s tax collection efforts will be easier. The businesses have to transact with only one company in a specific market segments. The business entity has to only contact one water supply company, one mail delivery agency, or one electricity provider, for their water, mail, and electricity needs. The consumers can easily locate the only entity responsible for the supply of water, electricity, and mail services. The stakeholders will have lesser time and difficulty finding and transacting with the monopoly company serving the needs and wants of the community.Pricing under the monopoly differs from the monopolized competitive market. The monopoly company can raise its selling prices without losing its current customer base. The customers have no other alternative but to pay the higher prices. The government can step in and set limits to the monopoly company’s price increases. The government can interfere when the monopoly company’s price increases borders on abuse of the customers. Government interference is required when the price increase does not equate to the improvement of the company’s current unfavorable service (Dudey, 1996).In terms of production, the monopoly enjoys exclusive rights to sell its products and services to the current and prospective customers. Microsoft is the exclusive seller of Microsoft computer software products (Gisser, 2001, p. Microsoft is the sole seller of Windows XP, Windows Vista, and Windows NT software. The company’s monopoly of the Microsoft office software forces all computer users to buy the original software from Microsoft Company.The monopoly must produce more than enough goods to serve the political needs of the constituents within the community. If the monopoly company fails to deliver the products on time, the government may cancel the monopoly company’s license to operate on monopoly status. Consequently, the government can locate and enter into a contractual relationship with other providers that will resolve everyday bothersome issues or facts.William Baumol (2011, p. 209) emphasized a monopolistic competitive market is
Baumol, W. (2011). Economics: Principles and Policy. New York: Cengage Learning Press.
Dudey, M. (1996). Dynamic Monopoly with Nondurable Goods. Journal of Economic Theory,
70 (2), 470-488.
Gisser, M. (2001). One Monopoly is Better Than Two: Antitrust Policy and Microsoft. Review of
Industrial Organization , 19 (2), 221-225.
King, S. (2011). Principles of Economics. New York: Cengage Learning Press.
McEachern, W. (2011). Economics: A Contemporary Introduction. New York: Cengage
Ottaviano, G. (2011). Monopolistic Competition, Multiproduct Firms and Product Diversity. The
Manchester School , 79 (5), 938-951.
Pecorino, P. (2009). Monopolistic Competition, Growth, and Public Good Provision. The
Economic Journal , 119 (534), 298-307.
Tucker, I. (2010). Economics for Today. New York: Cengage Learning Press.
Please type your essay title, choose your document type, enter your email and we send you essay samples