Monopoly........

[markssunwear]

Is there a law against a Monopoly? and what is considered a Monopoly?

[For-Life]

Is there a law against a Monopoly? and what is considered a Monopoly?

Monopoly is considered illegal in most nations. Now there are two types of monopolies. The first one is a competitive monopoly, which is legal. A competitive monopoly is when not everyone has the exact same good and it is competitive. We are in a competitve monopoly. Yes, most of us sell frames, lenses and contacts, but never the exact same kind. Pure competition is when the good is exactly the same, like wheat.

Then there is a pure monopoly when one company is the sole distributor of one product or service. An example of this is DeBeers who is pretty much the sole diamond producer in the World. Now there are some others. One example may be your area cable company. Because cable is a highly demanded product, but competition would not always be profitable, the government can allow it to be a monopoly under heavy regulations.

[optirep]

Forms of monopoly

Monopolies are often distinguished based on the circumstances under which they arise; the broadest distinction is between monopolies that are the result of government intervention and those that arise without it e.g. sole access to a resource, economies of scale, or consistently outcompeting all other firms.
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Legal monopoly

A form of coercive monopoly based on laws explicitly preventing competition is a legal monopoly or de jure monopoly. When such a monopoly is granted to a private party, it is a government-granted monopoly; when it is operated by government itself, it is a government monopoly or state monopoly. A government monopoly may exist at different levels (eg just for one region or locality); a state monopoly is specifically operated by a national government.
An example of a monopoly is AT&T, which was granted monopoly power by the US government, only to be broken up in 1982 following a Sherman Antitrust suit.
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Efficiency monopoly

An efficiency monopoly exists when a firm is satisfying consumer demand so well that profitable competition is extremely challenging. It is not the result of government granted privilege, subsidies, regulations, etc. To maintain its monopoly position it must make pricing and production decisions knowing that if prices are too high or quality is too low that competition may arise from another firm that can better serve the market. It is often described as a situation where a firm is able to keep production and supply costs lower than any other possible competitor so that it can charge a lower price than others and still be profitable. Since potential competitors cannot match the monopoly's efficiency, they are not able to charge a lower, or comparable, price and still be profitable.
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Natural monopoly

Main article: Natural monopoly
A natural pool is a monopoly that arises in industry where economies of scale are so large that a single firm can supply the entire market without exhausting them. In these industries competition will tend to be eliminated as the largest (often the first) firm develops a monopoly through its cost advantage. In these industries monopoly may be more economically efficient than competition, although because of potential dynamic efficiencies this is not necessarily clear-cut.
Natural monopoly arises when there are large capital costs relative to variable costs, which arises typically in network industries such as electricity and water. It should be distinguished from network effects, which operate on the demand side and do not affect costs. Counter-intuitively, the case of a monopolization of a key source of a natural resource is not considered a natural monopoly, because it is based on the running down of natural capital rather than the amortization of an investment in physical or human capital.
Whether an industry is a natural monopoly may change over time through the introduction of new technologies. A natural monopoly industry can also be artificially broken up by government, although (eg electricity liberalization, eg Railtrack) the results are at best mixed. Advocates of free markets, such as stout libertarians, assert that a natural monopoly is a lot of practical impossibility, and, given that a monopoly is a persistent rather than a transient situation, that there is no historical precedent of one ever existing. They say that the idea of "natural monopoly" is mere theoretical abstraction to justify expanding the scope of government, and that, in the case of nationalization or deprivatization, it is the government intervention itself that creates a monopoly where one did not actually exist.
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Local monopoly

A local monopoly is a monopoly of a market in a particular area, usually a town or even a smaller locality: the term is used to differentiate a monopoly that is geographically limited within a country, as the default assumption is that a monopoly covers the entire industry in a given country. This may include the ability to charge (to some extent) monopoly pricing, for example in the case of the only gas station on an expressway rest stop, which will serve a certain number of motorists who lack fuel to reach the next station and must pay whatever is charged.
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Coercive monopoly

Main article: coercive monopoly
A coercive monopoly is one where a firm is able to make pricing and production decisions independent of competitive forces because all potential competition is prevented from entering the market, whether via coercion applied by the monopolist or by some external actor. Some, particularly Libertarians, maintain that this state can only be achieved by government intervention.
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Horizontal versus vertical monopoly

Large corporations often attempt to monopolize markets through horizontal integration, in which a parent company consolidates control over several small, seemingly diverse companies (sometimes even using different branding to create the illusion of marketplace competition). Such a monopoly is known as a horizontal monopoly. A magazine publishing firm, for example, might publish many different magazines on many different subjects, but it would still be considered to engage in monopolistic practices if the intent of doing this was to control the entire magazine-reader market, and prevent the emergence of competitors.
A monopoly arrived at through vertical integration is called a vertical monopoly. A common example is vertical integration of electricity distribution with electricity generation, which is common because it reduces or eliminates certain costly risks.
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Economic analysis

[Chris Ryser]

Now that we defined monopoly in all it's versions how does it apply into our optical field?

[chip anderson]

Monopoly:

The strangle hold a precriber has on a patient when he won't give the Rx to the patient.

[chm2023]

A good friend of mine worked for the Justice Dept years ago. He tells me that monopoly is pretty much what the govt says it is! That's probably hyperbolic, but I think the idea is that the gov't decides which situations are the ones it wants to pursue--e.g. AT&T back in the 80s.

If you're thinking Essilor or Lux, I guess the question is whether horizontal or vertical monopoly is most harmful to the independent doc/optician. Or neither?

[For-Life]

Vertical could be worse for the independent, because the competitor has so much power that they can push the independent out.

However, horizontal would be worse overall as it would control everything that the market does. The independents can thrive like the days under Imperial, but only if the company allows you to. It is the consumers who usually lose out too.

[vikramg]

Why is Microsoft , with more then 95 % of the OS market not considered a monoply and broken-up under the act ??

[Barry Santini]

Monopoly:

The strangle hold a precriber has on a patient when he won't give the Rx to the patient.

So, let's unmake the Rx...and free it from being medical...

Then...strangle hold lifted? I think not.

No, refractionists hold a often feeling of entitlement to the fulfillment of their vision parameters.

Now what to do...!

Barry Santini, ABOM

[rainchild]

I used to work for office depot. a number of years ago they announced a merger with staples. They spent 20 million dollars merging head offices and then the government said "no way!" the two companies together became so huge they were a monopoly in the office supplies business. Cancelling the merger nearly crippled Office depot.

Lux doesn't come anywhere near being a monopoly as long as there are still so many strong independants and dispensing OD's in the market place. It is very much in lux's interest to maintain a strong independant market because a shrinking independant market limits its own potential for growth.