A pure monopoly refers to a single supplier of a particular product in a specific market. For regulation purposes, monopoly power comes into existence when one single firm is in control of 25% of the entire market (Genakos et al.) There are many reasons why a monopoly can form. For instance, a monopoly can form when a firm has ownership of a resource which is scarce such as Microsoft which owns the Windows operating system. Characteristics associated with this kind of market is that the single seller of a particular product becomes the price maker and dictates the price that they wish to sell their product. Additionally, monopolies are in possession of information that is unknown to other industries thus the reason why they can be able to make unique products that cannot be copied or rivaled.
A good example of a company that can be said to be a monopoly is Microsoft. The reason is that the company solely has control of the Windows operating system and controls the market in regard to this commodity and as a result, no other company has been able to produce this commodity. In this regard, they are the sole supplier of the windows commodity which is strewn all across the globe. Additionally, Microsoft maintains supernormal profits since they control almost three-quarters of the market and are in no direct competition regarding their product. There is no equity in the industry that Microsoft dominates since they have taken up more than half of the market. They are efficient in their production, delivering their product to many countries across the globe.
Works Cited
Genakos, Christos, K. U. Kuehn, and J. Van Reener. "Leveraging monopoly power by limiting interoperability: theory and evidence from computer markets." (2018).
