Monopoly Basics
The definition of a monopoly.
When one firm controls an entire market
One major benefit consumers get from competition.
Lower prices
The company that dominates online retail and raises concerns about market power.
Amazon
Laws that prevent monopolies and promote competition.
Antitrust laws
A market with many firms and lots of competition.
Perfect competition
A major downside of monopolies.
Higher prices and fewer choices for consumers
Competition pushes companies to improve this.
Product Quality
A company criticized for controlling its app marketplace and charging high fees.
Apple
The U.S. agency responsible for enforcing antitrust laws.
The Federal Trade Commission (FTC)
A market with only a few major firms (like airlines or phone carriers)
An Oligopoly
Why monopolies often innovate less.
Because they face no competition pushing them to improve
Why competition increases innovation.
Because companies must improve to attract customers
The government sued this company for buying Instagram and WhatsApp to eliminate competition.
Meta (Facebook)
When two companies agree to keep prices high.
Price fixing
When one company controls all parts of production (like Apple controlling hardware and software).
Vertical integration
Healthy competition gives consumers more of what?
Choices
Why were fans upset with Ticketmaster during the Taylor Swift Eras Tour sale?
Because the system crashed and there weren’t enough tickets
The term for selling products below cost to eliminate competitors.
Predatory pricing
Why is Google often taken to court for antitrust issues?
Because it’s the default search engine on many devices
The government blocks this type of business action if it reduces competition too much.
A Merger