In Economics, monopoly exists when a specific individual or enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it. Monopolies are thus characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods. Alternatively , it may be used as a verb or adjective to refer to the process by which a firm gains persistently greater market share than what is expected under perfect competition. The latter usage of the term is invoked in the theory of monopolistic competition.

It is often argued that monopolies tend to become less efficient and innovative over time, becoming "complacent giants", because they do not have to be efficient or innovative to compete in the marketplace. Sometimes this very loss of efficiency can raise a potential competitor's value enough to overcome market entry barriers, or provide incentive for research and investment into new alternatives. The theory of contestable markets argues that in some circumstances monopolies are forced to behave as if there were competition because of the risk of losing their monopoly to new entrants. This is likely to happen where a market's barriers to entry are low. It might also be because of the availability in the longer term of substitutes in other markets. For example, a canal monopoly, while worth a great deal in the late eighteenth century United Kingdom,was worth much less in the late nineteenth century because of the introduction of railways as a substitute.

Some argue that it can be good to allow a firm to attempt to monopolize a market, since practices such as dumping can benefit consumers in the short term; and once the firm grows too big, it can be dealt with via regulation. When monopolies are not broken through the open market, often a government will step in, either to regulate the monopoly, turn it into a publicly owned monopoly, or forcibly break it up (see Antitrust law). Public utilities, often being natural monopolies and less susceptible to efficient breakup, are often strongly regulated or publicly owned. AT&T and Standard Oil are debatable examples of the breakup of a private monopoly. When AT&T was broken up into the "Baby Bell" components, MCI, Sprint, and other companies were able to compete effectively in the long distance phone market and began to take phone traffic from the less efficient AT&T.

Business Project

Business Cover Letter
(Business Proposal Project Part 1)


To: Loan Officer, Lockwood National Financial Services
From: “Bitch’in Bakery” (A Subsidiary of Fetch Industries)
Date: 18 April 2008
Subject: Small Business Loan (Start-up Financing)



Dear Mr. Lockwood,

We, the owners of Bitch’in Bakery in conjunction with Fetch Industries respectfully request a small business loan in the amount of One-Hundred Thousand dollars. We currently have an investment of approximately One Hundred and Eighty Thousand dollars in securing our business location, purchasing bakery equipment, and establishing pay roll and accounting services. We plan to use the additional start up funds for initial bakery stock items, to set up vender accounts and to provide business capital for insurance and advertising.
We believe, with the help of LNFS, along with our experience and proven success with other entities within the Fetch Family of Corporations, that we can be both profitable and successful. Lockwood National has a long history of customer satisfaction as well as competitive rates. For these reasons we have chosen to solicit our loan requirements with your bank.
Thank you for your time and consideration, concerning this request for additional business assets.
Very Sincerely,

Crystal Smith and Hillary Rivera
Co-proprietors, Bitch’in Bakery
17623 Bear Valley Road Suite D
Apple Valley, Ca 92308
Bus. (760) 247-CAKE (2253)

Competition

Two businesses I believe to be in prefect Competition with eachother would be Homedepot and Lows. They are both successful home improvment warehouses. I reason i think that they are i competition with eachother is because right after they built a Lows on Aple Valley Rd. they built an Homedepot right across the street. The owners of Homedepot saw how much profit Lows was getting being the only home improvment warehouse in Apple Valley so they decided to build there aslo. The postiveness of having two Competing businesses right next to eachother is that if one raises there prices you can go to the other store. Another reason is if one is out supply of somethinfg you can go the other store.