Monopoly behaviour of the DeBeers Diamond Company

Abstract

Monopoly is the dominating one firm in the market, there is no competitors or no
other substitute firms in the market. Monopoly has an ability to set price on his own
product. Many researches have been analysed the efficiency of monopoly and its effects to
consumer behaviour. The inefficiency of Monopoly is proved by price is above the
marginal cost and it causes the shortage of product in the market. Thus, monopolist
produces and sells the limited quantity of product and it is below the rank the social
efficient level.
This coursework has been conducted on the monopoly behaviour of
DeBeers Diamond Company. In the Introduction section numerous papers on the efficiency
of a monopolistic market have been revived and analysed. In the body part natural barriers
to entry, unfair competition of computer software markets, monopoly pricing and social
cost of diamond market have been discussed, and in final part how social cost occurs the
government intervention to the market have been demonstrated.