Question

Dicuss some examples of local markets which are "monopolized". is this the type of monopoly good or bad? What are your thoughts? (Note: Most monopolies are found on the local level)

Answer 1

In local markets, where there is lesser scope of availability of substitutes, most of the makers tend to be monopolies. It could be electricity in an area ie in a state or a district or it could be bus service in a particular area. Usually bus services tend to be limited to a certain area ie they operate in only the states and are run by the state governments. Hence these are monopolized in that state or area. People who tend to travel within the city would do so by the buses operated by the state.

Another example of monopoly could be the food taken to cinemas. It is seen that most cinemas don't allow food from outside and the food or snacks from only the specific shops near cinema could be bought and eaten. This would monopolise the market of food in the cinemas.

The monopolies which is set by the government or is of a utility, in those cases, the monopoly is usually good because, if any other firm tries to compete in the market, it fails or goes into losses because of the low costs that government designates for the unit costs of these utilities.

In case of monopolies which are for a smaller areas , like the cinemas, it is usually seen that the prices of the goods are quite high and the monopoly seems to be a bad option .