Imperfect Competition: Important in a Free-enterprise System
... competition, providing that, it is within a free-enterprise system; thus, the economy can be stimulated and everything can be done legally. For instance, Monopolies have greatly stimulated the American economic system in the past. One of them was the steel monopoly that Andrew Carnie founded and financed. At that time monopolies were important because very few people were wealthy, and thus not everybody was able to afford buying a whole industry. However, over the time, thanks to many brilliant economists, people began to become wealthy; therefore, they began to dislike that monopolies had too much power and that they needed a share of wealth. Furthermore, I believe that, in our modern world today, monopolies need to be within an free-enterprise system, such as America, thus they can have some type of governmental regulation; hence, everybody can have equal opportunities to become successful. Moreover, Oligopolies, another examples of imperfect competition, are important to the economy because they provide crucial products and services to the consumers, but they need to be regulated by the government so that there are no hardships. For example, lets suppose that an Oligopoly of airliners decide to secretly raise price or to divide the market for their own benefit. In this case the consumer will lose and the oligopolies would gain too much power. Therefore, some type of governmental control needs to be exerted. A third example, monopolistic competition is important to the economy because it is the most common form of market structure in the Untied States; this is the type of competition were the majority of the people make their profits, but I believe that there has to be some sort of governmental control thus everything can be done legally. For instance, imagine t...