USE THIS ARTICLE: http://www.newyorker.com/tech/elements/the-oligopoly-problem F
ID: 1213554 • Letter: U
Question
USE THIS ARTICLE: http://www.newyorker.com/tech/elements/the-oligopoly-problem
Find a recent news article that discusses an oligopolistic industry in the U.S. Provide a usable link to the article (3 points by itself) and a summary of what the author is discussing. Focus your analysis on the main characteristics of oligopolies (barriers to entry, economies of scale, non-price competition, cartels). Each of you should focus on a different industry (market). Please do not write about the definition of each one, just how one of those effects the article. Thank you!
Explanation / Answer
Exploitation of concentrated private power is not a problem that will ever go away. In the United States, it has been a concern since the framing: the original Tea Party was actually a protest against a state-sponsored tea monopoly. The challenge is that power constantly mutates and assumes new forms. That’s why, whether overseeing private or public power, it’s important not to become fixated on form, but to attend to the realities that face consumers and citizens.
http://www.huffingtonpost.com/entry/post_6938_b_4851197.html?section=india
The author sites the examples of Comcast, Netflix etc to demonstrate that FCC( federal communications Commission has been indirectly controlling the regulatory body’s decisions in largely invasive way. This have given these operators, power of oligopolists, mutually benefiting from cartelization, even though formally they are not a cartel.
In the study of market structures, economists have always pointed out that formation of cartels is the natural progression of an oligopolistic market. There are in-built incentives for cartelization and this is a major weakness of the oligopolies.
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