Competition law Essay

A situation in which a single company or assort owns all or nearly all of the market for a granted type of product or service. By definition, monopoly is characterized by an absence of competition, which oftentimes results in high prices and inferior products.According to a strict academician definition, a monopoly is a market containing a single firm. In such(prenominal) instances where a single firm holds monopoly power, the company will typically be forced to divest its assets. Antimonopoly regulation protects free markets from being dominated by a single entity.Explanation MonopolyMonopoly is the extreme case in capitalism. Most believe that, with few exceptions, the system just doesnt construct when there is only one provider of a good or service because there is no incentive to improve it to meet the demands of consumers. Governments judge to prevent monopolies from arising through the use of antitrust laws.Of course, there are colourize areas take for example the grant ing of patents on new inventions. These give, in effect, a monopoly on a product for a set period of time. The reasoning tramp patents is to give innovators some time to recoup what are often enormous research and development costs. In theory, they are a way of using monopolies to promote innovation. Another example are common monopolies set up by governments to provide essential services. Some believe that utilities should offer public goods and services such as water and electricity at a price that is affordable to everyone.