As we have been learning throughout the past couple of days in class, monopolies are a pretty rare occurrence that seems to have very few examples. A monopoly is the exclusive possession or control of the supply or trade in a commodity or service. This means that the firm in control of the supply is able to change the price as they are the sole seller with no close substitutes, so everyone who wants their product has to buy through them. While this type of market is pretty uncommon due to government protection and antitrust laws, monopolistic competition where companies sell similar products that can be differentiated from each other, meaning they aren't perfect substitutes, is extremely common.
There are many different examples of monopolies throughout history and even currently in the economy. The most common example of a monopoly is Standard Oil, where Rockefeller created a new type of oil using kerosene instead of the much more expensive whale oil so that people could afford to light up their houses at night. As Rockefeller invented this new oil, he was the only one selling it, meaning he had full power over the price and how much would be sold. While it benefited the consumer, due to cheaper oil pricing, other oil companies would suffer due to being bought out or destroyed by Standard Oil. The government eventually broke up Standard Oil into many different companies to prevent one single monopoly. Another more recent example of monopoly was with Microsoft. When personal computers were just coming around, Windows was the operating system for a vast majority of these computers. Microsoft abused this power of having pretty much the only operating system by making users use their browser and their software rather than anyone else's. This was against antitrust laws and they were taken into court for the issue. Finally, less apparent examples of monopolistic competition, instead of monopolies, are all around us, as this type of competition is defined by companies selling similar products that aren't perfect substitutes. This is apparent in markets like coffee shops, grocery stores, hotels, as well as many more. If you want to buy coffee, there are many different options so those coffee shops will change many different things to entice you to go to their coffee shop, which allows them to raise prices.
Overall, monopolies are exclusive control of a product, while monopolistic competition is when different sellers are selling a similar product, with differentiation so they aren't the exact same product. Monopolies are extremely rare due to government protections and antitrust laws, while monopolistic competition is all around us.
https://firstquarterfinance.com/34-monopolistic-competition-examples-around-world/
Nice post! This really helped clarify to me the difference between monopoly and monopolistic comepetition. In real life, there are few actual examples of monopoly, so most times monopoly is referenced, people actually mean monopolistic competition. The same is often true for pure competition, because in the real marketplace, there are rarely times where multiple people are selling the same product. However, there are many, many examples of markets that resemble pure competition. Rarely are there are perfect examples of economic theory, which is why the study of economics is theoretical rather than practical.
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