What is meant by Monopoly?

“Monopoly is the state when a businessman dominates the market in his particular line of endeavour.”

Monopoly is the state when a businessman gets hold of the market in his particular line of endeavour. He may do so by fair or foul means. Mostly, a businessman offers his products or services at reduced costs and this results in huge losses to his rivals.

His rivals may even be wiped out of the market completely. After this the monopolist again raises the prices of his products (often to an excessive extent) to compensate for the cuts that he employed earlier. In this way, monopoly is considered to be an unfair practice that proves detrimental to the interests of the customers.

Sometimes a company produces many more products than its chief product and gives them other brand names just to avoid the opponents in that particular field.

For example, a publisher may run several publishing companies to create a false impression that his company is not reaping all the profits. This ploy often befools other players in the market especially if they are the uninformed ones.

However, creating a monopoly is not that simple and is often considered illegal in the eyes of law. In view of the fact that to become a monopolist many things have to be done illegally, such acts can be stopped by lodging a complaint against the firm in the court. Many a time governments step in to regulate a monopoly or to break it up by force.

It entirely depends on the monopolist how he wants to exploit the market situation. An ideal situation is the answer. When a businessman sells his services or products at such a price that is beneficial both for him and the customer, his state of being in monopoly is also not derided by anyone.

The monopolist can also use money earned in this way to better his services and products. In today’s complex world everyone is smart enough and there is strong competition for all types of services and products. So, it’s very difficult to create a monopoly.

It’s said that with great power comes great responsibility. A monopolist got to understand his social responsibility also. This responsibility becomes all the more important when your country is facing an economic crisis or is striving hard to uplift its weak economy.

Author - DeeKay

Tags - Finance, Economy

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