).
In assessing which of these models of a market would be most beneficial to the interest of a business, the most obvious choice is a pure monopoly. Although this model does not necessarily provide the best option for operations in terms of many aspects regarding society as a whole, in terms of business sense, it is the most beneficial and profitable model for a firm to operate in. As a business owner, if the product or service provided by a firm does not face competition from any other firm, the costs of providing the product can be lowered, supply can be determined at the full discretion of the firm, and pricing can also be fully left up to the firm.
Additionally, in some industries, a pure monopoly serves the purpose of providing stability and uniform standards. The Microsoft case is one in which this is a strong argument, as well as the services provided by the government -- the postal service, for instance, or the police force. The postal service, before the advent of private mail carriers for package delivery and other shipping services, was the only option for sending and receiving mail. In this model, it was able to provide regulated, uniform options for mailing and delivering packages; if a consumer needed to send a letter cross-country, the delivery times and prices for that service were established and easy to determine. The inclusion of many options for such delivery...
Similarly, the police force is an entity that can only be effectively carried out by a pure monopoly -- competitors in the law enforcement industry would only create confusion, a lack of uniform standards and response expectations, and potential for interagency miscommunications. Clearly, certain industries require pure monopoly to be effective.
In light of both the business benefits that a pure monopoly will provide in terms of regulation, pricing, and production expectations, as well as the lack of potential confusion and competition that will provide, I would elect to establish a business in a pure monopoly market rather than one of pure competition, oligopoly, or monopolistic competition.
Works Cited
Bloch, David (1996) "The Salt Monopoly in France," published online at http://salt.org.il/frame_econ.html. Accessed 5/20/06.
Boardman, Anthony E., and Aidan R. Vining (1989) "Ownership and Performance in Competitive Environments." Journal of Law and Economics 32 (April 1989): 1-34.
Cusumano, Michael, and Richard W. Selby (1995). Microsoft Secrets: How the World's Most Powerful Software Company Creates Technology, Shapes Markets and Manages People. Free Press.
Mankiw, Gregory (2003). Principles of Economics 3rd edition. Mason, OH: Thomson Higher Education.
