Monopoly EconomicsIntroduction¡§Monopoly¡¨ is defined by its market power. It is always known that monopolies possess exclusive control over their particular market and this gives them the sovereign authority to control the prices of their goods or services (Dictionary.com Unabridged (v1.1), 2006). They therefore represent the market. In fact, they have harmful effects on the consumer and social well-being. In this article, Section 1 will focus on the theory and economics of monopoly. Section 2 will discuss a recent case of monopoly, such as that of the web search engine company Google, whose real repercussions are still unclear to most consumers. Finally, this essay will conclude with an overview of how world markets are opening up to each other and how competition and new government policies are curbing the growth of monopolies and their continued power.1 Monopoly Theory and EconomicsIn Theory , monopoly can be defined as the presence of a single firm in an industry or a number of firms sharing the majority of the market - an oligopoly (Sloman, 2005). In practice, the monopoly is considered to be 25% or more of the market. Market power is shaped by these monopolies in their respective fields and they make supernatural profits from it. The production of an individual firm manipulates the price of such goods or services, and this in turn is referred to as market power (McAleese, 2004). 1.1 Profit maximization in monopolyMonopoly follows the same rules for profit maximization as in perfect competition. That is, the cost curves look similar to those of perfectly competitive firms, although the revenue curves look dissimilar (Sloman, 2005). Figure 1: Profit maximization under monopoly (adapted... middle of paper...). 4, 2007, from ABI/INFORM Global Database).9. Shepherd, William G. (1979). The economics of industrial organization. Hall of Make-Believe: Englewood Cliffs.10. Sloman, J. (2005). The business economic environment. Pearson Education Limited: Harlow, Essex.11. Thomas M. Lenard and Paul H. Rubin (2007, August 21). Googling “Monopoly.” Wall Street Journal (Eastern edition), p. A.14. (Accessed: November 3, 2007, from the ABI/INFORM global database).12. Wakefield, 2006] Wakefield, J, Google faces China Challenges, BBC News, 25 January http://news.bbc.co.uk/2/hi/technology/4647468.stm, 2006 (accessed 1 November 2007). 13. Walter S. Mossberg (2005, March 10). Google Toolbar places links on other people's sites, and that's a bad idea. Wall Street Journal (Eastern edition), p. B.1. (Accessed: 4 November 2007, from the ABI/INFORM Global database).