VI. Answer the following questions:

1. What is a monopoly? 2. What are the first three kinds of monopoly? 3. What examples of important state monopolies are given? 4. What monopoly are Canadian nickel and the Suez Canal examples of? 5. What are certain inventors permitted by law to have? 6. What word in the last paragraph shows that the fourth type of monopoly is quite distinct from the other three? 7. What happens when certain companies obtain complete control over particular commodities? 8. What do the Americans call their anti-monopoly laws? 9. What does Britain use to restrict special arrangements?

Communicative situations

1. Round-table discussion. The question on the agenda is «Competition is one of the cornerstones of free enterprise».

You may include the following points in your discussion:

• the principal kinds of market structures;

• perfect competition and perfectly competitive markets;

• imperfect competition: monopolistic competition and oligopoly;

• legal monopolies (public utilities, patents, copyrights and trademarks);

• the distinguishing features of perfect and imperfect competition.

Use the table given below:

Characteristics of Economic Markets
	Perfect Competition	Monopolistic Competition	Oligopoly	Monopoly
Number of Firms	Many independent firms. None able to control the market.	Many firms providing similar goods and services.	A few large firms providing similar goods and services.	A single large firm.
Control over Price	None. Market determines price.	Influence limited by the availability of substitutes.	Often influenced by a «price leader».	Much control.
Product Differen-tiation	None. Products uniform and of equal quality.	Products and services differentiated to meet the needs of specific markets.	Significant for some products like automo-biles. Little for standardized products like gasoline.	None.
Ease of Entry	Relatively easy to enter or leave the market.	Relatively easy to enter or leave the market.	Difficult. Often requires large capital investments.	Very difficult.
Part of Economy where prevalent	A few raw agricultural products (wheat, corn).	Retail trade (food, gasoline).	Steel, chemicals, autos, computers.	Local telephone, electricity, and gas utilities.
Methods of marketing	Market exchange or auction.	Advertising and quality rivalry; adminis-tered prices.	Advertising and quality rivalry; admi-nistered prices.	Advertising and service promotion