Medium_of_Exchange

Water is a nature local monopoly; people who do not have a well for water are forced to use the local water municipal company in town. The water company hooks up to anyone’s home and he or she has to pay a monthly price for the water that is pump in the home. The water company tests the water to make the quality good so more people will have city instead of a well. Not everyone has to have well; if a person lives outside of town then he or she has a well then. To have a well, the home owner will have to have one drilled if it is a new home going up. The local water municipal company will drill; casing laid for the well. Once that is done the workers lay pipes to get the water into the home, and then hook an electric pump to the well so that it will pump water to the home owner house. Home owners might have to buy water filter to be able to drink the water that is pump in to the home.  And then the water must be tested for bacteria and other pollutants. This is at great expense that the average person cannot afford. And after someone go through these expense he or she might not be able to drink the water that is drilled due to the pollutants in the water such as metal, fertilizers.  These water municipals companies provide a pipeline in rural area within the city. Just one pipe in one area, so this means no other company can provide water in that area.  So people are forced into using the local water company for that water that he or she may need for basic life. Some people have no other choice there is no option such as people living at low sea elevations such as southern Florida like Key West. Where living at sea level or elevation 1.00 foot above sea level does not provide good ground water, salt water intrudes it causing brackish water.  The prices are controlled by the local government or water commissions set up by the State or local government, depending on laws in he or she State concerning water. He or she is charged a onetime hook up fee which covers the cost putting in that water line so that he or she can have water to his or her house. Also included in anyone water fees are charges for treating that water so that he or she can drink it. These guide lines are set up through the Federal Government EPA. The EPA set the standard for when the water is tested and all fees that he or she as a customer haves to pay. The water Company cannot raise customers rate at which he or she are charged unless the water company notify the customer of the future cost associate with the new rates and hold public hearing in front of the local commissioner. To which commissioner will in turn decide in accordance of the public meeting whether or not the customers deserve such a rate hike. The public as a whole can sway the commissioner whether the cost is deserved or not.  Also if it is close to a local election can have an impact on that decision as well whether it is approved or denied. A competitive market is a strategy to win markets shares away from another player. Flea markets are an example of such a market, the flea market has many vendors all selling the same or similar products in one area but all competing for the same market share. In order to win customers away from the other vendors he or she would have to be willing to offer the product at a lower price than the competitor. By lowering the profit margins in order to sell more products, the vendor could sell more than the competitor. When lowering the profit margins this would lower the supply and raising the cash flow to be able to buy more products to start the whole cycle again.    Oligopoly changes the nature of a free market; having a few seller in the market and only a few buyers. Mc Donald's the biggest buyers of Potatoes for their French fries. Other companies such as Wendy and Burger King also join in with Mc Donald's. These companies control the type of potatoes that is grown, the price the companies are willing to pay and the time the company needs the product. The demands that these fast food companies can make on the distributors is like no other. No other market can compare to these demands and control over the product. The fast food companies want the best product for the cheapest price as their price. The price is fixed and cannot go up or down to reflect market swing in prices of the potatoes.  The fast food companies have to set the price low to buy the potatoes to reflect this; which can have an effect on the overall price of everybody selling potatoes. Grocery stores like Safeway, Kroger and Wal-Mart are oligopoly to shoppers.  In the economical times that the people of America live in are forced to shop at the stores that can offer the lowest prices to us as consumers. As consumers he or she cannot afford to pay higher prices. Grocery stores in turn say to the suppliers we have to have the lowest price for the product. In order to do business with these stores to get their product to the market place, the supplier is forced to lower their prices in order to do business with the bigger stores. The supplier lowers the price and the profit margin which in turn is passed on to the next business say the farmer. Then the farmer is forced to accept lower price because of the bigger stores that drive prices down but not in a good way because eventually the bigger store like Wal-Mart drive out the mom and pop stores in the local towns because he or she cannot compete with the price of the bigger chain grocery stores. This leads to job losses in local markets, small business that cannot lower prices any farther go out of business, which leads to job loss and lower wages for workers.  With lower wages for workers he or she is forced to shop at these types of stores even though he or she do not condone the way the bigger store do business as affect all of us eventually.  References Hannaford, Steve , 9/4/2007, “Local monopolies and oligopolies”, retrieved from web site http://www.oligopolywatch.com/2003/10/14.html Hannaford, Steve: 9/4/2007, “Oligopolies and Oligopsonies” retrieved from web site http://www.oligopolywatch.com/2003/04/09.html