Search results
Results from the WOW.Com Content Network
A monopoly produced through vertical integration is called a vertical monopoly: vertical in a supply chain measures a firm's distance from the final consumers; for example, a firm that sells directly to the consumers has a vertical position of 0, a firm that supplies to this firm has a vertical position of 1, and so on. [2]
Note that the above mechanisms only solve the problem of double marginalization; from an overall welfare point of view, the problem of monopoly pricing remains. It should also be noted that while some of the solutions presented above, such as mergers, have a positive effect in minimizing the double markup present within the vertical competition ...
[1] [2] A monopoly occurs when a firm lacks any viable competition and is the sole producer of the industry's product. [1] [2] Because a monopoly faces no competition, it has absolute market power and can set a price above the firm's marginal cost. [1] [2] The monopoly ensures a monopoly price exists when it establishes the quantity of the ...
A government-granted monopoly or legal monopoly, by contrast, is sanctioned by the state, often to provide an incentive to invest in a risky venture or enrich a domestic interest group. Patents, copyrights, and trademarks are sometimes used as examples of government-granted monopolies.
In theories of competition in economics, a barrier to entry, or an economic barrier to entry, is a fixed cost that must be incurred by a new entrant, regardless of production or sales activities, into a market that incumbents do not have or have not had to incur. [1]
Gasoline production provides another example of supply restraints and competitive dominance by means of vertical integration. Market foreclosure plays a consistent role in the dynamics of the gasoline industry and more specifically with large refineries with significant capabilities of production. Researchers have estimated that US wholesale ...
helping to solve economic problems such as double marginalization, inefficient input substitution and insufficient pre-sale services. However, vertical agreements may entail competition law risk when there is a chance that e.g. barriers to entry increase, competition is reduced or softened, and other ways when horizontal collusions are facilitated.
Language links are at the top of the page. Search. Search