Monopolies

 
 
 
 

Vocabulary

entity	promote	dictate (2)
quality	quantity	bothered (2)
accept	force (2)	Reich Mark
spice	valuable	match (3)
trade	customer	entrepreneur
obtain	extreme	exclusive rights
act (2)	antitrust	tackle (2)
legal	trust (2)	follow suit
illegal	break up	competition
fine (2)	initially	invention
decade	case (3)	monopoly
fail (2)	browser	exclusive (2)
have to	giant (2)	regulator
lottery	lucrative	ran/run/run (2)
own	software	network (3)
slap (2)	product

 
 
 
 
 

Video

 

 
 
 
 

Transcript

What is a monopolist?

It’s a firm or entity that can dictate anything: the price. The quantity and the quality of a product, because it’s the only that sells that product.

Customers may be forced to accept high prices and poor quality.

There have always been monopolists; throughout the seventeenth and eighteenth centuries. The Dutch East India Company, for example, controlled the valuable spice trade between India and Europe.

The twentieth century saw a monopoly on the sale of matches: there was only one company selling matches in sixteen countries, Welt Holzer.

In 1930, a Swedish entrepreneur known as the “Match King” gave the German government a loan of five-hundred (500) million Reich Marks. In return, he obtained the exclusive rights to sell his matches in Germany.

This monopoly didn’t end until 1983.

In 1890, the United States became the first country to begin tackling monopolies. The Sherman Antitrust Act made it illegal to monopolize a market. Germany followed suit in 1958. The EU only introduced an antitrust law in 2003.

In 2013, competition regulators slapped a fine on Microsoft. The US software giant had to pay five-hundred-sixty-one (561) euros to the European Union for failing to promote browsers from other companies.

In extreme cases, a company may have to be broken up because of it’s a monopoly.

But it is national governments that often have the biggest monopolies. For decades, the German government ran lucrative businesses like the postal services . . . and the lottery. Germany’s rail network is still owned by the state.

Monopolies often develop as a result of inventions, which initially control the market, like the first mobile phones from Motorola for example, or photocopiers from Xerox.

Everyone wants the products, so customers are generally not bothered if the company has a monopoly.

 

 

Questions

1. What is a monopoly?

2. Are monopolies a modern phenomenon?

3. Were monopolies more, less or just as common today than they were in the past? What are some examples?

4. What is prominent example of a government going after a monopoly?

5. Is there an irony about governments and monopolies? Why might this be the case?

6. How do monopolies often develop?

7. Monopolies are good for business, the economy and society. Is this correct or incorrect?

 

A. Can you think of any monopolies or former monopolies?

B. Are some monopoly companies very popular? Do people love some monopolies?

C. Some companies take advantage of their monopoly power. What do you think?

D. How could you, your business or company become a “monopoly” and dominate the market?

E. What might happen in the future?

F. Should people and governments do anything regarding monopolies?