Monopoly vs Monopolistic Competition

How often do you play Monopoly? It is my kid’s favorite game – especially my older son – he can effectively cut everyone out of the game pretty quickly.

I am so glad that business in general, does not operate as a monopoly because then all of us would be employed by someone and never have an opportunity to really find our true potential, let alone do the work we really love to do.

The system most of us operate under is called Monopolistic Competition. That is where several businesses who offer the same product can differentiate themselves from each other fairly easily. Let’s take the restaurant industry for example. You have everything from McDonalds to the hottest Five Michelin Star restaurant in Manhattan. They both offer food but with different target markets – McDonalds wants everyone to come and get fries with that, while the Michelin Star award winning place in New York City caters to special occasions such as engagements and anniversaries. Yes you can get food at either restaurant; it’s the quality and the price that make the difference between the two.

Here in the US, we have gotten rid of quite a few monopolies such as when they broke up “Ma Bell,” giving us competition for communications. The biggest monopoly is the IRS, they are the only ones authorized to collect revenue from taxpayers. With all the controversy lately, I am wondering if this is another Monopoly that needs to be broken up. Revenue collection could be handled by several smaller firms who would not only compete for the collection procedures but would be obligated to have an accounting of every dime spent, meaning the funding already spent on tax collections would go much farther when real business practices start taking over.

Even if you want to be a monopoly getting there takes time and planning – we can help you with the planning, although the Monopoly part is up to you. So give us a call or schedule a meeting today. We can even set up a game and see if you have the power a true monopoly takes.