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Monopolies Essay

577 words - 3 pages

A significant benefit of government intervention and assistance for companies attempting to enter monopoly and oligopoly markets is easy, assured entrance into the market. In 1999 American Airlines decided to crush competition by drastically reducing the cost of airfare and increasing benefits to consumers. The American government’s Department of Justice chose to file a civil lawsuit against American Airlines (Sniffen, 1999). Rather than spend tax payer dollars to initiate and carryout a lengthy expensive law suit, the government could have, invited other businesses to enter this market by providing temporary incentives. This would have naturally kept the price at a decent level, and would have kept companies in healthy (for the consumer) competition (Sniffen, 1999). The Government already provides a vast array of incentives to start, maintain and excel in the world of small ...view middle of the document...

Once the barriers are broken down more competition in the specified market will undoubtedly take place. History has shown that completion always favors the consumer and increases public spending which in turn helps the economy as a whole (“Government incentives for Business,” 2011). Thus provides us with another benefit of government assistance for businesses trying to breach a monopoly or oligopoly. Already established small and foreign businesses cannot compete with the large powerhouse corporations in the United States. Huge corporations or powerhouses can slash prices the instant the small or foreign businesses step on to the field to play. In turn, this forces the small or foreign business to shut down or bought out (HOLUSHA, J. 1987, March 10). If these already established businesses were granted temporary incentives (startup capital to establish a location in the United States, or tax breaks) they would not be pushed out of the market so easily and would be able to compete with pricing and product creating a buyers’ market (Sniffen, 1999). When consumers prosper, so does the economy. With more choices and flexible pricing consumers are more apt to buy versus window shop. Creating better competition also for different demographics to have access to goods that otherwise would not have been able to purchase. Take for example the tablet; Apple was the catalyst in this race and offered a touch screen, throw in your purse, take anywhere, portable PC. But it was costly. Flash forward and now consumers who could only dream of owning a device like this can purchase one for under $150.00 compared to Apple’s $600.00-$800.00 range. Competition amongst business is healthy and drives down costs. If these businesses that wanted to gain entry into well established markets that have little if no competition, could get government assistance, there would be a decrease in cost and increase in purchasing which would all lead to consumer confidence and a stronger economy (HOLUSHA, J. 1987, March 10).

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