Your feedback will be greatly appreciated. Thanks in advance.
Q: Point out one product that you believe is produced by a âpureâ monopoly firm (or a firm with a high degree of monopoly power).
Is it a local, regional or national monopoly?
What are some of the Barriers to Entry into this industry?
For the product listed, list substitute(s) for this âmonopoly.â
Demonstrate how the relative âclosenessâ of the substitutes listed determines, to a large degree, effective limits to the monopoly power of these firms.
A: I believe Amtrak is a monopoly. This is a national monopoly because its available coast to coast, you may travel locally with Amtrak, state to state as well. The barrier for entry are the limited railroad systems for Amtrak, limited resource, cost to produce additional train system, and fact that Amtrak is not producing a profit even though they are a monopoly. Train transportation is not popular anymore, and is difficult for them to cut costs because they donât have a lot of train tickets purchased. So, they increase their prices for what they do sell. Other forms of transportation are not changing the fact that it is a monopoly, but has affected it from taking control of transportation. Purchasing a rental car, bus ticket or a plane ticket has been more convenient and inexpensive. I personally have wanted to purchase a train ticket multiple times, but the routes are wrong, or the length of trip duration has exceeded my availability, and costs are not worth the time. There are smaller train lines but are not monopolized like Amtrak. Example you travel and look up Amtrak station, name of the company. When you fly the airlines is not called the airport which has multiple airlines. Train station is usually Amtrak.