Wednesday, December 8, 2010

Post 4: 8 Things I Learned

  • I learned that in perfect competition in order to be successful many buyers and sellers must work independently.
  • When there are a lot of competing companies, producers will spend millions on advertising for their products to persuade the buyers their product is better than the other brands out there.
  • If there are any obstacles for entering a business, that market can not compete easily and to its fullest potential.
  • Breakfast cereals are considered an oligopoly in the United States. there are only 3 companies that control over 80% of the cereal population ! ! !
  • Natural monopoly is when it only makes sense for there to be one business selling a certain product or service, where competition is unrealistic.
  • The very first antitrust law passed in 1887 to regulate the railroads monopolistic practices. The owners of the railroad were taking advantage of being the only form of long distance transportation and having extremely high prices, nickel and dimeing every customer for everything. This law was passed to stop that.
  • The next major monopolistic run business to be broken up was standard oil. They were undermining their competitors by buying up all the materials to make oil barrels so other company had no way to get their product to customers, they also worked out deals with certain railroads and in turn were receiving discounts on transportation lowering the cost of their product.
  • Because the people of America are continuously conniving and can't seem to follow the rules, antitrust laws are still in effect today. Our Gov't still enforces and moniters each business.

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