Response

In your response posts to peers-

This should be one double space page.  One paragraph per student response.

comment on your own experiences with such industries and on their impact on you.

Additionally, discuss whether you agree or disagree with your peer’s stance on regulation, explaining why.

Alam

An example of a firm in an oligopolistic market that abuses its power is Comcast (now xFinity).   Comcast has aggressively worked to keep other companies from proliferating their services and speeds (Cassidy 2017), this has stifled competition and forced its own price leadership on the market.  Additionally, Comcast has been reportedly asking potential entrants to pay them due to it claiming that it is a transit service for the internet, in certain regions (Cassidy 2017).   With Comcast in a duopoly role, they have focused minimal attention on customer service and engage in deceptive pricing schemes (Kestenbaum 2017).

I would agree that we need increased government oversight on such industries.  Oligopolies can optimize pricing schemes that maximizes their revenue and often forces the consumer’s hand (Smith 2014).  There is a finite amount of purchasing power per person and if your costs force consumers from being able to purchase in other sectors, you are forcing consumers to limit what they spend on (Wu 2017).  This leads to other sectors stagnation in innovation and competition (Thompson 2016).

Using xFinity as the example, they have distorted the cost of cable and internet services significantly, causing competing companies to react, generally negatively affecting the consumer (Lee 2014).  This limits the competition from suppliers and causes general increases in prices.

Emerson

Based on the reading assignment for this week, cell phone industry is one example of an oligopolistic market in which are being dominated by four companies: AT&T, Verizon, Sprint, and T-Mobile.  In the past, there were more cell phone carriers that the consumer can choose, however that size have shrunk in the recent years due to merging and acquisitions. A combined two-third of the market are controlled by AT&T and Verizon.  According to the blog post, How Oligopoly Works in the American Cellular, the two firms collude to determined when and what percentage of the prices to increase which benefit in profit gain that retain a shared market level.  “Verizon and AT&T have particularly engaged in collusion in ensuring that after a price decrease, they instituted more expensive data bundle packages that were unfortunately had to be compulsorily taken up by the customers of the two firms. This involved the customers getting into a deal of purchasing smart phones” Z., D. (2020).

With the latest merge of T-Mobile and Sprint which was approved by the Justice Department in June 2019, critics believes that the consumers will be paying a higher bill due to a small competition in the cell phone market.  With that in mind, the government should be able to have an increase oversight in the cell phone market to protect consumers for being taking advantages since there are small companies to choose from.