RE: Some thoughts on natural monopolies by jamalgayoni

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· @jamalgayoni ·
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<div class="text-justify">Market Structure Is a system that regulates/governs market rules that occur in the continuity between the seller and the buyer in a transaction made for a particular purpose, there are several factors that can classify form Market Structure.

In a perfectly competitive market, decisions about the number of output firms individually can not affect the price level, and for decisions on pricing, the demand curve is horizontal, therefore price is considered constant, regardless of output. Thus the total profits will be obtained.

The monopoly market is a form of interaction between demand and supply where there is only one seller/producer dealing with many buyers or consumers. Pure monopoly is a market where there is only one seller. There is no substitution for the goods or services offered by the monopolist. Thus, the monopoly market has absolutely no competition, real or potential. Thus the actions of a monopolist do not affect other companies, such as price changes or the conduct of advertisements, and the actions of other companies also do not affect the monopolist. Pure monopoly, like pure competition, is an extreme market form and does not exist in reality.

Existing industries are near monopolies markets that are mostly served by one company or a seller in a particular location. For example, a doctor who opens a practice in a small town where he is the only doctor in town. Called approaching monopoly because the doctor is not really the only seller (service) and instead of having no rivals at all. In other nearby cities doctors are also available. The only meatball seller in our village, may be categorized as "near-monopoly". Markets approaching monopoly are usually local, but some industries are nationwide. For example, Pepsodent toothpaste is available in a store without any significant rivals and controls a large part of the store's market.</div>
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@tobixen ·
When it comes to toothpaste and other household items, there can be some dirty play, particularly if the distributor has strong hands and the shop has weak hands.  If a significant amount of customers will use Pepsodent and only Pepsodent, because they think it's simply the best toothpaste, and if no other competitor is nearly as popular as Pepsodent, then it's easy for Pepsodent to give the shop a deal like ... "we'll allow you to sell pepsodent and give you a good discount if you sell our toothpaste and no other toothpaste".   If the shop will reject the first offer, the second offer may be ... "we'll allow you to sell pepsodent but without any discount if you arrange the shelves so Pepsodent will be the dominating toothpaste".

Toothpaste is typically a quite insignificant cost in a family budget, hence there is no strong price pressure on it.  If the customer believes Pepsodent is better than some other brand, he would typically choose Pepsodent even if the other brand was for free.  Anyway, there exists plenty of competition, there are other international brands like Colgate and Aquafresh ... and [even more](https://en.wikipedia.org/wiki/List_of_toothpaste_brands) - most markets also have domestic brands (in Norway we have Solidox, in Russia they have quite many domestic brands, etc.
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