Non Competitive Market Examples

This chapter covers what it is like for an industry to live in a non-competitive market. In this chapter it gives good examples of different types of industries that don’t have to worry about a competitive market. It begins off by express how in New York City, taxi drivers are restricted in number to how many can actually run a business. In order to do so, you have to have this medallion that authorizes you to have authority over the entity.

Medallions have been sold as high as $175,000 back in the 1990’s and now can be sold as high as $250,000.

Essay Example on Non Competitive Market

This enables for no competition within the market itself. From there it goes on to explaining that as an industry or good, is limited in number, it hold a higher value and because of its low supply are able to charge at an extensively high price. The article elaborates that when the government is involved for whenever reason the system is always thrown off balance.

However, the article also begins to illustrate on how government involvement is also set to protect the industries that are tying to compete in it.

For example with the hair braiding business that were opening up the Californian government focused on ensuring that those who spent considerable time and effort in becoming licensed in cosmetology that they were the ones striving in the business not the unlicensed individuals. Yet, though state level is true, federally the government itself does not like competitive market.

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This is true when looking at the U. S. postal service vs.

FedEx where Congress has issued anyone delivering first class by FedEx is mandated to a postage stamp tax. Overall, with all the many examples that are given in the chapter its main point is that a lot of business hate competitive markets and will try and do anything to beat out the competition in order for them to receive as much of the profits as possible. Based off of the examples that I have read, I feel that the one regarding the pricing on telecommunications is the most harmful of all.

The reason being is that when by allowing such outrageous charges for connection charges and not allowing any new connections, you are essentially isolating the business itself. Making it virtually immovable from any angle and allowing for full control over the people within the industry. By not allowing any competition and charging at a rate of whatever you like, we essentially cause for an ultimatum in decision. Whether you pay an arm and a leg for the service or you don’t have it.

If both methods were to work in successfully knocking out the competition essentially you wouldn’t see a difference in the method. In the end you are still knocking out your competition and charging it at your desired price. Whether that means that you lower your prices, to a designated amount at which you are still probably making a profit or raising the difficulty for others. All in all the most important factor about these two methods is that it dens work and it does knock out the competition.