Question

examples of monopolies
directions: find two pictures online of products that would be sold by a monopoly and paste the pictures below. then explain why each good would be considered to be a product that would be provided by a monopoly. do not use an example that is already provided in this assignment or ch. 7 powerpoint.
paste picture here
for economic product #1
paste picture here
for economic product #2
explanation
explanation

Explanation:

To complete this assignment, we need to identify two monopoly products. A monopoly exists when a single firm is the sole provider of a good or service, often due to barriers to entry (e.g., exclusive rights, high startup costs, control of key resources).

Product #1: Local Water Utility (e.g., a city’s water supply)

• Explanation: Local water utilities are typically monopolies. Most cities have one company (often government - owned or regulated) that supplies water. The infrastructure (pipes, treatment plants) is extremely expensive to build, creating a natural monopoly. New firms can’t easily enter because the cost of duplicating the water distribution system is prohibitive, and there’s no incentive for multiple firms to lay parallel pipes in the same area.

Product #2: De Beers (Diamonds, historically)

• Explanation: For many years, De Beers controlled a large percentage of the world’s diamond supply. It had exclusive access to diamond mines, used marketing to create a perception of diamonds as a unique luxury good, and signed contracts with suppliers to limit competition. This control over resources and distribution channels made it very difficult for other firms to enter the diamond market and compete, so De Beers operated as a monopoly (though its monopoly power has diminished in recent years).

Answer:

Economic Product #1: Local Water Utility

• Picture: (You would paste an image of a water treatment plant or a city’s water distribution network here.)
• Explanation: Natural monopoly due to high infrastructure costs; no viable competition.

Economic Product #2: De Beers Diamonds

• Picture: (You would paste an image of De Beers - branded diamonds or diamond jewelry here.)
• Explanation: Controlled diamond supply and market access, limiting competition.