Is Walmart A Monopoly In 2022?
Although Walmart has several traits of a monopoly due to its dominance in the retail industry, however, it’s still not considered one as of 2022. For example, companies that offer similar products like Costco, Amazon, and Target can still compete with Walmart. Since there’s monopolistic competition, Walmart is not considered a true monopoly.
If you are still unsure if Walmart is a monopoly, read along to see what I found out!
What Is A Monopoly Market Structure?
A monopoly is a market structure in which only one company sells a product, and there are no close substitutes for that product.
That said, there are four types of monopolies, including:
Natural Monopolies
These companies arise when their supply curves exceed demand curves, and they can capture economies of scale.
An excellent example of this would be the electricity industry, where the cost of additional production decreases as the quantity produced increases.
Legal Or Government Monopolies
These companies arise when a patent or copyright law restricts competition for a certain period on an innovative product or process, such as pharmaceuticals and drugs.
Technological Monopolies
Technological monopolies occur when the production of a good is controlled by one company, like Apple iPhones.
Geographic Monopolies
A geographic trust arises when there are no other producers of a good or service in an area, like the NFL in the US.
Why isn’t Walmart a Monopoly?
A Monopoly is unique. Google is a monopoly because there is no other search engine that can compete with Google because of its size, revenue, and service quality, but the same isn’t true about Walmart. Walmart has an advantage in the retail business because of its size and smooth supply chain. It can offer heavy discounts and still make profits.
Let’s study the features of a Monopoly company to understand why Walmart isn’t a Monopoly.
FAQ
Why is Walmart allowed to be a monopoly?
What type of monopoly is Walmart?
What type of market is Walmart?
