Monopoly in Australia

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The word ‘Monopoly’ arises from two words named ‘Mono’ and ‘Poly’. The term ‘Mono’ means Single and ‘Poly’ means Control. Monopoly market is the market where only a single seller exists in the market. The single seller sells unique products to their people with no close substitutes. A seller of any country cannot enter into the market easily because of some reasons i.e. Government rules and regulations, Government license and different economies of scale. Thus, seller faces no competition because he is the sole seller of the commodities with no close substitutes. There is no difference between the firm and industry in the monopoly market. Under Monopoly market, the monopolist has full control on demand and supply of the product. The monopolist has full power to set the prices of the products. The consumer may pay the prices of the products that are fixed by the seller. The firm in this market can change the price and quantity of the products at any time. The Monopolist always acts as a rule maker and price maker in the whole country. The monopoly business cannot be established on a long term basis.

Apart from it, when there are multiple sellers in the industry with similar substitutes of the commodities, is known as the Monopolistic market. In this competition, every firm has the freedom to enter into the market and the firm produces differentiated products in the market.      

In the above figure, it has been shown that the demand curve slopes downward from left to right. The fig. describes that Average Revenue (AR) curve and Marginal Revenue (MR) curve slopes downward from left to right. MR line is shown below the line of AR. It has been observed that AR is greater than MR.

Post Services in Australia

Australian Post services are considered as the Government owned corporation which was incorporated in Sydney in the year 1809. The Postal services in Australia are considered as the major monopoly of Australia. Australian Postal Service is considered as very active and strong services. The Act named Australian Competition and Consumer Commission (ACCC) issues their final decisions after the proposals of the Australian posts. The Post services of Australia proposes to change the off-peak pre-post services to make the post services more attractive to bulk mail customers. These changes can arise with the reduction of the present delivery window from four business days to two days. Further, the Australian postal services propose to increase the prices of the mail service business including pre-post services. The benefits of pre-post services is that it provides a discount to the wholesale mail consumers who sort the mail and also barcode the mail before the lodgment. Thus, the Australian postal services revise the proposals from time to time.  Under the revision, some of the proposals are discussed as –

  • Statutory monopoly has been adopted by the Australian postal services with the pricing of not more than $2.40 and weighting is less than 250g.
  • The prices of Small off-peak letter increases by 41.9 cents from 41.6 cents.
  • Further, the prices of small regular – letter increase by 45.7 cents from 42.7 cents.

Apart from it, the postal services of Australia have various issues such as – Options of tracking system in Australia, standards of Parcel delivery and Inadequate pricing of postal services.     

Role of ACCC and Government in the monopoly market of Australia

Under the Consumer and Competition act 2010, the role of ACCC is to increase and propose the pricing of the letter services in the monopoly market of Australia. ACCC submits the accounts that are received in a preliminary view and in the issuing paper. ACCC makes a decision through the formal meetings of Board and Commissioner. The members of Board and Commissioner of ACCC are the statuary officers. The initiatives of ACCC includes promotion of consumer education in rural and regional areas and promotion of the Indigenous communities. Other initiatives of ACCC are – To remove the market failures by promoting and maintaining competition, to protect the interest of the consumers, to support fair trading in the market, to promote the operations that are most economical in nature, to invest in monopoly infrastructure etc.       

Other than the role of ACCC, Government also plays an important role in the Australian Monopoly market. Reason being, the Government has received an authorization to pass the act. Under the Regulation Act 1989, the authorization is provided by the Government to other people. The services that are offered by the Government is very impressive and fast. These services are adequately handled and managed by the Government. The prices of post services that is charged by the Government has been increasing day by day, especially in any occasion. The increasing prices are not negotiable in nature and it creates difficulty for the people because the people sometimes cannot afford the increasing prices of the services.