Why are Glasses So Expensive

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Student’s Name Professor’s Name Course Date Why are Glasses So Expensive? In the video, Sticker Shock, it illustrates the extent of monopoly power in the pricing strategy of luxury goods. The reporter evaluates the unrealistic pricing of sunglasses, in particular, from the Luxottica company headquartered in Milan, Italy. The company enjoys a significant global market share in the eye-wear industry. As such, this gives it an upper hand in controlling the prices of its commodities. Consumers have a little control over the pricing strategy employed by the company since there is a minimal competition existing in the market. In this case, it gives a clear illustration as to why Luxottica brands are highly priced regardless of the low cost of production associated with its products. Being the market leader in this particular industry, the company has been able to set the prices of the sunglasses as high as possible (CBSNewsOnline, n.pag). Based on Adam Smith’s arguments, free trade is the best suitable form of an economic system in any particular economy. Smith didn’t view monopoly as a dangerous aspect which is attributed to free but rather as a way of promoting competition in the production of goods and services. On a different perspective, Karl Marx criticized the concept of free trade and monopoly arguing that monopoly destroys competition and consumer power. Though both arguments are sensible one way or the other, Karl Marx doctrine has a better illustration in the case of Luxottica monopoly power. As stated in the video, Luxottica has been acquiring and purchasing smaller companies which try to compete with their brands thereby expanding their

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