Economics Question: Download Questions PDF
What are the differences between perfect competition and monopoly competition?
Answer:
In a monopoly, you are gaining an unfair advantage over any competition because you own so many infrastructures. Monopolies used to be known as trusts, which is why you sometimes hear of Anti-Trust Law violations.
At one time, AT&T owned every phone line, every phone and every piece of phone equipment in the country. They monopolized the industry; how could you compete with them when they owned everything? Similarly, the Post Office has an excellent infrastructure for delivering mail, but they do not have a monopoly because FedEx and UPS and DHL have all found ways to carve out a healthy piece of the parcel moving business, so although UPS always grumbles about the Post Office, they do OK in competition.
At one time, AT&T owned every phone line, every phone and every piece of phone equipment in the country. They monopolized the industry; how could you compete with them when they owned everything? Similarly, the Post Office has an excellent infrastructure for delivering mail, but they do not have a monopoly because FedEx and UPS and DHL have all found ways to carve out a healthy piece of the parcel moving business, so although UPS always grumbles about the Post Office, they do OK in competition.
Download Economics Interview Questions And Answers
PDF
Previous Question | Next Question |
In economics what is a normative statement? | What are business cycles and what role do the Federal Reserve and Federal Government have in trying to control them? |