Monopoly, Monopolistic competition and Oligopoly
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Institution

Monopoly, Monopolistic Competition and Oligopoly
Introduction
Monopoly business is a type of trade structure whereby there I only one producer of a product in the market. Hence, there are barriers existing that prevent other entrants interested in the market. A good example of monopoly businesses are the electricity companies. Two types of monopoly exist. It can either be legal or efficiency. Illegal monopolies exist when a corporation has developed new technology to keep production costs low enough to discourage competitors. On the other hand, legal monopolies exist when a business is subsidized by the government thus they are protected by the government from the competition. For instance, provision of local telephone services in the United States is an example of a legal monopoly.
Strategies made by a firm to monopolize the market for good or service
However, a company can decide to monopolize the market for a particular good or service. It can, therefore, set down strategies that enable it to become a monopoly. For instance, the firm might use vertical integration whereby it controls the entire supply chain, from production to retailing. Secondly, another strategy a company can employ is the use of horizontal integration whereby they decide to buy other competitors until they remain the only business in the market. Thirdly, a company might choose to set the cost of production of a commodity too high or too low. A high or low cost of production will discourage other competing firms thus leaving the business. Furthermore, the industry might decide to set the pricing strategy whereby it lowers the prices of the commodities but increase its production. This leads to other businesses in the same company making losses and hence, closes the business (Nikaido, 2015).
Best practice that would apply