1 discussionashley willcox posted dec 3 W r i t i n g
I will need the initial post and 2 classmate responses done.
The United States has a variety of regulations to address the economic harm resulting from monopoly power in an industry. This includes the Sherman Act of 1890, the Clayton Act of 1914, and the Federal Trade Commission Act of 1914. These acts were aimed at restricting the formation of cartels and monopolies to protect consumers and ensure competition. The article The Oligopoly Problem argued that oligopolies fall through the cracks of these regulations and leave consumers unprotected from harmful business practices where industries are highly concentrated. Read the article and respond to the following in your initial post:
- What are examples of firms in an oligopolistic market that abuse their power? Explain how they abuse their power and describe the impact on consumers.
- Do you agree with the author’s feelings about increased government oversight of such industries? Why or why not?
In your response posts to peers, comment on your own experiences with such industries and on their impact on you. Additionally, discuss whether you agree or disagree with your peer’s stance on regulation, explaining why.
To complete this assignment, review the Discussion Rubric document.
Ashley Willcox posted Dec 3, 2020 8:04 PM
Good evening class,
I am actually going to take some information from my paper that we have been writing. My paper is on Netflix. I believe Netflix is part of an oligopolistic market. While there are some smaller streaming service companies, Netflix dominates in its market. Netflix has abused its power by raising its prices unexpectedly over the years. There was a time where Netflix promised its customers that the prices would remain the same for awhile and then they raised their prices shortly after. While price increases are necessary to stay competitive and provide the most content for its customers, the unexpected rubs customers the wrong way and can lose their trust. They may start to look at other streaming services and its prices. However, Netflix is one of a kind and people tend to keep paying the price no matter what.
I have mixed feelings on if the government should increase their oversight over these companies. I feel like when the government becomes more involved, prices tend to increase even more. Taxes increase more. Costs continue to rise and I believe the more involved the government is, we will only continue to see the increase in costs.
2nd classmate response needed
6-1 Discussion: Economic Impact of Oligopolies
Catharina Machado posted Dec 3, 2020 8:44 PM
An oligopolistic company would be described as a company in a market with very little competition or in a market with few companies dominating it. An example of a firm in a oligopolistic market would be car insurance companies. The options for car insurances are limited, with very few firms offering different rates. Because of this, consumers are left with not many options when picking their car insurance and are often times paying more for their insurance than their own car payments. Car insurance companies abuse their power because they are able to up charge customers based on their vehicle make and model, the year of their vehicle, and any of their past driving records. Age also plays a big factor on car insurance prices, which is not entirely fair. In Massachusetts, car insurance is required for all drivers, and for new drivers, the car insurance quotes are extremely high due to new drivers being a liability. However, I find this unfair, because people should only be charged according to their existing driving record, not according to how they may or may not drive based on their age or the year of their vehicle.
I do agree with Tim Wu’s feelings about increased government oversight of such industries. If more regulations are set into place to discourage firms from abusing their power and being unfair to customers, then more companies could enter the industry and adhere to new regulations that are fair and take the consumers’ wellbeing into consideration.