\"Which is eviler? Apple, Facebook or Google?\" \"The Myth of the Benign Monopol
ID: 1207357 • Letter: #
Question
"Which is eviler? Apple, Facebook or Google?" "The Myth of the Benign Monopoly," "Has Google become the new Microsoft?" "Google CEO talks of good, evil and monopoly fears."
These are some of the headlines from various new sources regarding monopolies. If perfect competition is one end of the market structure spectrum as the most ideal form of market, monopoly holds the other end of the spectrum as the least ideal form of market. But why? why it is often deemed to be harmful to the society, and what antitrust policies have been created to prevent firms from forming a monopoly or to break up already existing monopolies?
All market structures will be "deviation" from perfection competition -meaning, we should compare these new structures back with perfection competition to try to understand why these are not as efficient as perfection competition where the purest form of free market exists. However, is that when a monopoly engages in perfect price discrimination, it actually is just as efficient as perfect competition. Does that mean that a monopoly can indeed be as good for the economy as perfect competition can? If not, why not? What is the difference between the two cases?
Explanation / Answer
The one to be eviler is Facebook. Its true Google has become the new Microsoft.
If perfect competition is one end of the market structure spectrum as the most ideal form of market, monopoly holds the other end of the spectrum as the least ideal form of market.
It is because as the market has competition of so many search engines like Yahoo, Bling, MSN. Google is the monopolist firm out of all.
Monopoly can indeed be as good for the economy as perfect competition could become. The difference between monopoly and perfect competition is that the former rules the market while later has more no. of firms to rule the market.
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