Monopolies In A Capitalist Economy :: essays research papers fc

In a capitalist economy there are both wanted and undesired monopolies. However, in a capitalist economy original monopolies are needed. Monopolies have a big impact on the economy and the consumers because of the amount of control that the monopolies have on the economy. There are certain propagation when it is best to have monopolies then others, it really depends on the status of the economy. There is no doubt that monopolies do indeed play a critical eccentric in a capitalist economy, but sometimes there are negative effects.It is indeed true to say that not all monopolies are unwanted in a capitalist society. An example of a monopoly that is not unwanted is that of a public utility, like SDG&E (San Diego Gas & Electric). These bring in goods and services that are vital to the publics well being as far as functioning goes. Public utilities are an example of a pure or natural monopoly. A pure or natural monopoly is a single firm in an industry. This is the most effecti ve way to provide very meaning(a) goods and services. An example of a public utility monopoly that affects our everyday life is that of SDG&E. They are the only power compevery in San Diego County and thus they have a monopoly on San Diego. This, however is the kind of monopoly that the government likes to keep running and in operation because they know that we cannot do without for very long. If SDG&E decided to go out of business there would be no power supplier for all of San Diego County. In addition, because of the fact that SDG&E is the only gas and electric car provider they can name almost any price and we have no choice but to comply with their demands unless they can find a adept alternative, like solar power.The impact of monopolies is felt very heavily on the consumer. The biggest effect of a monopoly in a market is that it drives up the prices of the product in that market (South West, pg. 179). This happens because there is no competition and no other produ cer to drive prices down. The government has often tried to break up monopolies when they are presented because it exit put a negative impact on the economy. There has even been legislation passed against monopolies. An example of a piece of legislation is the Sherman Anti-Trust Act which stated "any combination or conspiracy in constraint of trade" (www.