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We will also look at what game theory is and its affect on monopolies and cartels and the welfare affect of each of the above mentioned.
A monopoly is defined as, "sole control of a particular line of goods or services in a given market or the means to control distribution and price."(Webster's, 2000) In a monopoly situation there is only one person with a particular good or service and because of this they can price their product accordingly. A good example of a monopoly in the Cincinnati area is the local grocery chain Kroger's which is headquartered in downtown Cincinnati, Ohio. Other grocery chains such as Biggs's and Meijer's were not able to build in certain areas near where a Kroger's store was already located...
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