Oligopoly in US

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Student’s Name Instructor’s Name Course Date Oligopoly in the US Oligopoly has remained to be a long standing problem in the US since time immemorial. The major reason for its entrenchment in many industries is due to the lack of understanding of what oligopoly is. Most citizens confuse it with monopoly while the rest fail to notice its existence. Oligopoly was very prevalent in the airline industry in the United Sates. The existing companies tried their best to keep out newcomers in the industry. Airlines like United and American managed to keep their competitors out of their business routes by uniting to control the slots at Chicago, Washington, and New York airports (Wu 1). In the credit card industry, new companies were also not spared. Maser Card and Visa spent much of their time preventing American Express from joining through the creation of parallel policies and other underhand methods. The Justice Department tried to control the prevalent oligopoly in the US back in the twentieth century by going after the oligopolistic cartels leading to positive milestones in the fight against the practice. Cartels in the tobacco industry and oil such as Standard Oil were eliminated in the process. The underlying conviction at the time was that any firms which maintained same prices though not in agreement on the same should be considered as conspirators in price-fixing. Delta and US Airways were thus regarded as price-fixers at that time. The fight against Oligopoly, however, faced serious backlash from critics who argued that firms should not be punished for parallel pricing as if this was the case, every gas-station owner would be regarded as a felon.

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