Economics - Market | Question and Answer

Economics
Name of the Student
Name of the University
Course ID

Introduction
• Natural monopoly market
• High fixed cost
• Economies of scale
• One firm can operate efficiently
• Google: Tech giant
• Monopoly like power Figure 1: Natural monopoly market

Question A.i: Monopoly in
Search Engine Service
• Monopoly: market with single seller
• Accounts 67 percent share in the search engine market
• Share in the organic search market is close to 90 percent.
• 180 million unique visitors each month
• Economies of scale
• Does not suppress competition
• Other competitors include Bing, Yahoo and MSNFigure 2: Market share of
different player in Search
Engine Market

Question A.ii: Monopoly in
Online Advertising Service
• Dominance in digital advertising
• Accounts 74.6 percent of search advertise spending
• $100 million revenue from online advertise service
• Argument against monopoly
• Several other competitors
• Scope of intense competition Figure 3: Market share of
different players in online
advertising market