List any possible monopoly industries in Hawaii and explain briefly how do they affect Hawaiian residents' life.
Monopolies in Hawaii
Hawaii is a state with only 1.4 residents. Not only does Hawaii have a small population but it is also separated from the mainland US which makes its economic markets quite small. These conditional are ideal to monopolies which seek to control the supply for an entire market.
Answer and Explanation:
The first such example of a monopoly in Hawaii is MATSON, the firm responsible for shipping goods from the mainland to Hawaii. It is by far the largest firm that provides such a service and you can see ships and crates labeled with their name frequently. More examples of monopolies include Hawaiian Cement and Hawaiian Airlines. These monopolies exist because the market is small and secluded. If Hawaii was a state with the same population but attached to the mainland, it would not face these monopolies. This is because many other firms can compete easily due to the greater variety and lower cost of transportation of goods and services. Put in economic terms, there are less barriers to entry. These barriers may be natural but they still exist.
The effects of these monopolies raise the prices of goods and services and cause economic growth to slow. MATSON can set prices as they like because they know they control the market. If any other firm tries to enter the market they will be unable to complete since MATSON has already scaled and has legislative approval. The same goes for Hawaii Cement and Airlines which also set prices above the competitive market rate. Just like any monopoly they create dead weight loss. There are many other examples of monopolies but I chose these three to show examples of industries vital to the economic growth of Hawaii but yet as inefficient due to the lack of competition.
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from Intro to Business: Help and ReviewChapter 3 / Lesson 13