- Local monopoly
A local monopoly is a monopoly of a market in a particular area, usually a
town or even a smaller locality: the term is used to differentiate a monopoly
that is geographically limited within a country, as the default assumption is
that a monopoly covers the entire industry in a given country. This may include
the ability to charge (to some extent) monopoly pricing, for example in the case
of the only gas station on an expressway rest stop, which will serve a certain
number of motorists who lack fuel to reach the next station and must pay
whatever is charged.
- Coercive monopoly
A coercive monopoly is one where a firm is able to make pricing and
production decisions independent of competitive forces because all potential
competition is prevented from entering the market, whether via coercion applied
by the monopolist or by some external actor. Some, particularly Libertarians,
maintain that this state can only be achieved by government intervention.
- Horizontal versus vertical monopoly
Large corporations often attempt to monopolize markets through horizontal
integration, in which a parent company consolidates control over several small,
seemingly diverse companies (sometimes even using different branding to create
the illusion of marketplace competition). Such a monopoly is known as a
horizontal monopoly. A magazine publishing firm, for example, might publish many
different magazines on many different subjects, but it would still be considered
to engage in monopolistic practices if the intent of doing this was to control
the entire magazine-reader market, and prevent the emergence of competitors.
A monopoly arrived at through vertical integration is called a vertical
monopoly. A common example is vertical integration of electricity distribution
with electricity generation, which is common because it reduces or eliminates
certain costly risks.
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