What is a Monopoly? Monopoly – Only 1 firm that makes the product, NO COMPETITION! – Examples: Standard Oil Company (owned all the oil in the USA) Price maker- Can set the price at anything! Producer controls price!

TYPES OF MONOPILIES Natural Monopoly Geographic Monopoly Technological Monopoly Government Monopoly

Types of Monopolies GEOGRAPHIC MONOPOLY – the only business in a geographic region. *These are declining in America because people are so mobile.* EXAMPLE: The only gas station in the desert! EXAMPLE: The only gas station in the desert!

Types of Monopolies Technological Monopoly- a monopoly created by the government granting patents. Patent – government protects your idea or product Copyright – government protects your writing Dr. Seuss had his books copyrighted! If you see this symbol, it is copyrighted! Dell has a patent on its PC! Apple has a patent on its Mac.

Types of Monopolies Natural Monopoly - a monopoly created because it is cheaper for 1 company to do it! *called a natural monopoly because it usually* *deals with natural resources* Electric Companies Water Companies

Types of Monopolies Government Monopoly – monopoly created because it is controlled by the government Examples:

Vertical Monopoly - a company that controls all aspects of the production, distribution, and sale of a product Andrew Carnegie : Carnegie Steel Company

Horizontal Monopoly – A company that controls all of the same type of products. Delta taking over Northwestern Airlines John Rockefeller – Standard Oil Company

Trust = Monopolies Anti Trust Laws – Government passed laws that did not allow monopolies in America Sherman Act of 1890 – First Anti Trust/Monopoly Act