Monopoly Companies in Australia

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Introduction of Monopoly

The term ‘Monopoly’ has been derived from the two words such as ‘Mono’ and ‘Poly’. The term Mono means ‘single’ and Poly means ‘control’. Thus, Monopoly is the market situation in which only a single seller sells the products with no close substitutes. The single seller in Monopoly market may be in the form of a single partnership company and an individual owner. In this market, there is no difference between an industry and a firm. A Monopolist has full control of the supply of the products. He has the power to set the prices of the commodities. A buyer may give the prices of the commodity that is fixed by the seller. In Monopoly, the cross elasticity of demand between the product of seller and monopolist must be very small which means that the business organization can achieve the profits by increasing the sales of products with decreasing the pricing of the products. 

According to Ferguson, “A pure monopoly exists when there is only one producer in the market. There are no dire competitions.”

It has been also observed that the curve of demand slopes downward from left to right. The following figure shows that the average revenue curve always slopes downward from left to right. The fig. is shown as–  

The above fig. shows that Average revenue (AR) and Marginal Revenue (MR) slopes downward from left to right. The curve of Marginal Revenue is below the curve of Average Revenue which shows the OQ output. Here, Average revenue is shown as PQ and marginal Revenue is shown as MQ. Thus, it has been observed that Average revenue is greater than the Marginal revenue i.e. AR> MR or PQ > MQ.

Australian Monopolies companies

The major sector of Australian Monopoly is the Postal services of Australia. Australian Postal service is very strong and active and no other entrants can enter into the country easily for accessing the market. Australian post corporation was incorporated in 1809 with the appointment of Sydney. Australian Post Corporation is the Government-owned corporation that offers postal services to people in the country. The headquarters of the Australian post is located in Melbourne. Monopolist often acts as a price maker and rule maker in the overall country. This type of business cannot be established on a long term basis. An Australian Competition and Consumer Commission (ACCC) issues their final decisions from the proposal of the posts of Australia.  The Post services of Australia is not proposing to maximize the 60 cent prices of their ordinary letters. The postage in Australia proposes to enhance the prices of mail services of the business which include Pre –Post services. This Pre – Post services provides a discount to the wholesale mail customers who barcode and sort the mail before the lodgement. Australian post also proposes to change the Off-peak pre-post services for the purpose of making the post services more attractive to its bulk mail customers. These changes can be made by reducing the present delivery window from four business days to two business days.  The increasing gap between peak and off-peak price increases the use of postal network services very effectively. The Post services revise their initial proposals in Australia from time to time. Some of the proposed Australian post under the initial revision are discussed as –

  1. The prices of small regular letter increase from 42.7 cents to 45.7 cents.
  2. The prices of small off-peak letter increase from 41.6 cents to 41.9 cents.

Apart from it, the postal services of Australia follow the statutory monopoly which costs not more than $ 2.40 and weighing less than 250g. Under the Competition and Consumer Act 2010, ACCC has a role to propose and increase the prices of the monopoly letter services of Australia. The final decisions of ACCC consider the account submissions that is received in the issuing paper and preliminary view. Beyond ACCC, Government also plays an active role because it receives an authorization to pass the act. The authorization by the Government is offered under the Regulation act 1989. The services offered by the Government’s  Authorization is very fast and impressive. These services become more impressive when the government manages and handles things successfully. The Government influences the price of services by being the sole authority. It has been observed that the pricing of letter posting is increasing during an occasion. These price increases of the postal services is not negotiable in nature and become tougher for the people as sometimes the people cannot afford these services. Thus, the postal services provides the authorization of Peddling letters in Australia. On the other hand, Australian post also comprises certain issues i.e. standards of parcel delivery, postal service’s pricing, options of tracking in Australia. Apart from the postal services, Water supply is another monopoly company that operates in Australia.

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