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Simple English definitions for legal terms
monopoly power
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A quick definition of monopoly power:
Monopoly power refers to the ability of a company or organization to control prices or prevent competition in a particular market. This power is often determined by the size of the company's market share, or the percentage of the market that they control. When a company has monopoly power, they can charge higher prices for their products or services without fear of losing customers to competitors. This can be harmful to consumers, as it limits their choices and can lead to higher prices.
A more thorough explanation:
Monopoly power refers to the ability of a company or organization to control prices or exclude competition in a particular market. The extent of monopoly power is often determined by the size of the market share held by the company.
- Microsoft has been accused of having monopoly power in the computer software industry due to its dominant market share in operating systems.
- De Beers, a diamond mining company, has been accused of having monopoly power in the diamond industry due to its control over the majority of diamond mines and distribution channels.
These examples illustrate how a company with a large market share can use its power to control prices and exclude competition. In the case of Microsoft, it has been accused of using its dominant position to force customers to use its products and limit the ability of competitors to enter the market. Similarly, De Beers has been accused of controlling the supply of diamonds and driving up prices by limiting the availability of diamonds on the market.