Monopolies: The Villains That Might Be Heroes?

No, this is not about the board game Monopoly that you play with your friends and family and have control over. This is a different monopoly—one that actually controls YOU!

Imagine this: you live in a small town, craving some ice cream. Enter John’s Ice Cream. John is the king of ice cream—he owns the sugar, the cows for milk, and all the necessary supplies. You walk into his shop to satisfy your craving. John says, “You want two scoops? That’ll be $35. Sprinkles? That’s another $8. Oh, Skittles? That’s $10 more.” You try to bargain, but John shuts you down and says, “I’m your only option. Take it or leave it!”

So, in business terms; A monopoly is a market structure where a single seller dominates the entire market, with no close substitutes for its products.

Since John is the only ice cream shop in town, he can exploit consumers, take advantage of their lack of alternatives and information failure, and charge outrageous prices. Classic monopoly behaviour!

Now that it’s clear what a monopoly is, is it possible that such an exploitative business like John’s could actually benefit consumers?

Yes, That’s actually possible! Because John owns all the raw materials—sugar, cows, milk, and more—he produces ice cream on a massive scale. This lowers his production costs, and in some cases, he might pass those savings on to consumers with competitive pricing, leading to lower prices!

With the high profits John earns, he can afford to reinvest in research and development. Imagine he uses those profits to create new, innovative flavours or improve the quality of his ingredients. Over time, this could significantly enhance your ice cream experience with John!

So, as bad as monopolies may sound, even John’s Ice Cream has the potential to benefit you!

Written by: Tehreem Ali