External factors play a big role in how markets, like monopolies and oligopolies, work. Here are some important things to keep in mind:
Government Rules: The government sets rules that can help or hurt competition. For example, when the government controls a service, like water or electricity, it can create a monopoly. This means no other companies can join in.
Market Demand: Changes in what people want can affect prices in a monopoly. For instance, if suddenly more people want electric cars, new companies might start selling them, making the market more competitive.
New Technology: New inventions can change market structures. For example, streaming services changed how we watch movies. Before, video rental stores had a monopoly, but now there are many options for viewing.
Global Trade: Buying and selling goods with other countries can weaken local monopolies. This adds more competition and changes how markets operate.
These outside factors help shape how companies act and interact in their markets.
External factors play a big role in how markets, like monopolies and oligopolies, work. Here are some important things to keep in mind:
Government Rules: The government sets rules that can help or hurt competition. For example, when the government controls a service, like water or electricity, it can create a monopoly. This means no other companies can join in.
Market Demand: Changes in what people want can affect prices in a monopoly. For instance, if suddenly more people want electric cars, new companies might start selling them, making the market more competitive.
New Technology: New inventions can change market structures. For example, streaming services changed how we watch movies. Before, video rental stores had a monopoly, but now there are many options for viewing.
Global Trade: Buying and selling goods with other countries can weaken local monopolies. This adds more competition and changes how markets operate.
These outside factors help shape how companies act and interact in their markets.