Research an organization or brand that you feel is a monopoly. Determine if the
ID: 1154407 • Letter: R
Question
Research an organization or brand that you feel is a monopoly. Determine if the monopoly is a regulated natural monopoly and why. How high is their profit margin? How large is their market share which allows this organization or brand to dominate the market? Do you foresee any weaknesses that would allow entrance into this market so that this organization or brand becomes an oligopoly? Research an organization or brand that you feel is a monopoly. Determine if the monopoly is a regulated natural monopoly and why. How high is their profit margin? How large is their market share which allows this organization or brand to dominate the market? Do you foresee any weaknesses that would allow entrance into this market so that this organization or brand becomes an oligopoly? Research an organization or brand that you feel is a monopoly. Determine if the monopoly is a regulated natural monopoly and why. How high is their profit margin? How large is their market share which allows this organization or brand to dominate the market? Do you foresee any weaknesses that would allow entrance into this market so that this organization or brand becomes an oligopoly?Explanation / Answer
Con Edison.Inc is an organization that can be called a monopoly. Con Edison is an organization that provides electric, gas and steam utility services to consumers in the New York region.
Con Edison.Inc is a regulated natural monopoly since power generation is an industry that has very high costs to enter the business, which prevents most organizations from considering investing in this area. It is regulated since laws in New York prevent any organization from gaining singular control of any market. The state of New York imposed a rate cut on electricity service providers in the state indicating that the market is regulated. There are other alternative organizations for energy services but you will get your bills from Con Edison. Any complaints registered with another organization will be dealt with by Con Edison. This is because they are either subsidiaries or are linked to Con Edison. Hence, they are a regulated natural monopoly.
The company's profit margin as of March 31, 2018 is 49.73%. This means that their net profit as a share of the revenue is 49.73%.
Even as analysts say that there is an increasing chance of reduction in costs of entering the business, reports indicate that the electricity rates in New York are more than twice the average rates in the country. This is a key factor that prevents or is an obstacle to potential entrants to the business of power supply and generation. Con Edison has cemented its position in the electricity business as the single largest provider of electricity utilities. There seems to be little chance of a potential threat from a new entrant to its business due to high rates and relatively high entry costs.
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