Under the common law, many natural monopolies operate as common carriers, whose business is recognized as having risks of monopoly abuse but allowed to do business as long as they serve the public interest. Common carriers are typically required to allow open access to their services without restr...
The monopolistic firm can simply set a price point that maximizes its profits rather than setting prices by supply and demand. Some types of firms are considerednatural monopoliesbecause there's a significant first-mover advantage that discourages competitors from entering the market. Other monopolies...
The supply and demand forces primarily dictate the production and pricing of goods and services. Nevertheless, government regulation and oversight through laws, policies, taxes, subsidies, etc., is critical to fostering social welfare, preventing monopolies, and addressing market deficiencies. Balancing ...
What is an Example of a Divestiture? Anti-trust regulatory pressure can result in a forced divestiture, typically related to efforts to prevent the creation of monopolies. One frequently cited case study for anti-trust divestitures is the break-up of AT&T (Ma Bell). In 1974, the U.S. Just...
Anastasio Somozaassumed the presidency of Nicaragua in January 1937. Succeeded in 1956 by his son Luis Somoza Debayle, the Somoza family would spend the next 40 years accumulating vast wealth through bribery, corporate monopolies, bogus real estate deals, and stealing from foreign aid. After the ...
Economic theory says a monopolist earns premium profits by restricting output and raising prices. This only occurs after the monopolist prices out or legally restricts any competitor firms in the industry. However, there is mixed historical evidence that natural monopolies formed before the Sherman Anti...