Monopoly

External link: Salt and the evolution of monopoly (salt.org.il). The American Maxima is known for a balance between sport and luxury; other models tend to focus more on comfort. Advocates of laissez-faire capitalism, such as the Austrian school, maintain that a salt monopoly would never develop without such government intervention. It is built on the standard FF-L platform of the Altima, rather than the stretched FF-L used on the American-market Maximas. Anyone was allowed to purchase salt; however, strict legal controls were in place over who was allowed to sell and distribute salt. In some markets, it is sold as the Nissan Cefiro. The "Gabelle", a notoriously high tax levied upon salt, played a role in the start of the French Revolution and is possibly the most cruel example in recent history. A smaller Maxima, from 2003, is sold in the Asia-Pacific region and based on the Nissan Teana.

Changing sea levels flooded many of these sources during certain periods and caused salt "famines" and communities were left to the mercy of those who monopolised these few inland sources. up). Mines and inland salt springs being scarce and often located in hostile areas like the Dead Sea or the salt mines in the Sahara desert, they required well-organised security for transport, storage and highly monopolised distribution. Despite the tuned engine and the sportier positioning, it is slower than the Altima, thanks largely to its heavier weight (200 lb. A combination of strong sunshine and low humidity or an extension of peat marshes was necessary for winning salt from the sea - the most plentiful source - by solar evaporation or boiling. The rear independent suspension returns, this time using a multilink setup similar to the Altima. Until common salt (sodium chloride) was mined in quantity in comparatively recent times, its availability was subject to the vagaries of climate and environment. A six-speed manual is still standard on some models.

When AT&T was broken up into the "Baby Bell" components, MCI, Sprint, and other companies were able to compete effectively in the long-distance phone market and started to take phone traffic from the less efficient AT&T. However, SEs in the US can be had with an optional five-speed automatic transmission. AT&T and Standard Oil are debatable examples of the breakup of a private monopoly. The Australian version only comes with a four-speed automatic transmission. Public utilities, often being natural monopolies and less susceptible to efficient breakup, are often strongly regulated or publicly-owned. Interestingly, in Australia, the Maxima has the same engine, but Nissan has set the maximum power to only 170 kW. (This is a rather optimistic view of how effectively regulation can substitute for competition.) When monopolies are not broken through the open market, often a government will step in to either regulate the monopoly, turn it into a publicly-owned monopoly, or forcibly break it up (see Antitrust law). It is also present in the Nissan Murano, Infiniti G35 (Nissan Skyline sedan), Infiniti G35 coupe, Quest, Infiniti FX35, Infiniti M35, and the Altima.

Some argue that it can be good to allow a firm to attempt to monopolize a market, since practices such as dumping can benefit consumers in the short term; and once the firm grows too big, it can then be dealt with via regulation. The VQ35DE is also used in the 350Z Track, Touring and 35th Anniversary Edition where in new models, it yields 221 kW. For example, a canal monopoly in the late eighteenth century United Kingdom was worth a lot more than in the late nineteenth century, because of the introduction of railways as a substitute. However, all Maximas in North America right now are built in Smyrna, Tennessee, where the Altima is also built. It might also be because of the availability in the longer-term of substitutes in other markets. The VQ35DE and its predecessor, the VQ30DE, have won Wards 10 Best Engines award every year since the competition's inception in 1995. This is likely to happen where a market's barriers to entry are low. In the US, it comes with the venerable VQ35DE, a DOHC V6 engine that now produces 265 hp (198 kW).

The theory of contestable markets argues that in some circumstances (private) monopolies are forced to behave as if there were competition, because of the risk of losing that monopoly to new entrants. The latest generation Maxima shares its platform with the Nissan Altima. Sometimes this very loss of efficiency can raise the potential value of a competitor enough to overcome market entry barriers, or provide incentive for research and investment into new alternatives. The last generation Maxima GLE was the basis for the Infiniti I35. It is also often argued that monopolies tend to become less efficient and innovative over time, becoming "complacent giants", because they don't have to be efficient or innovative to compete in the marketplace. In 2003, there was a special edition called the Titanium Edition with special wheels and interior treatment as well as a new color (Polished Titanium). However, total social welfare declines compared with perfect competition, because some consumers must choose second-best products. In addition, the model got a slight refresh with a larger grille opening, headlamps with high-intensity discharge (HID) low beams, a six-speed manual transmission with optional helical limited-slip differential, revised 17" six-spoke wheels on the SE models, new 17 inch seven spoke rims on the GLE models, clear taillights, and some interior and exterior refinements over the 2000 to 2001 models.

Assuming that costs stay the same, this does not lead to an outcome which is inefficient in the sense of Pareto efficiency; no-one could be made better off by shifting resources without making someone else worse off. In 2002, the engine was replaced for the whole lineup with a 3.5 L VQ35DE that produced 255 hp (190 kW) and 246 ft·lb of torque. In this way the monopoly will secure monopoly profits by appropriating some or all of the consumer surplus, as although the higher price deters some consumers from purchasing, most are willing to pay the higher price. A 2001 20th Anniversary edition got an increase of 5 hp (4 kW), different interior treatment, body kit, special wheels and other tweaks,. In standard economic theory (see analysis above), a monopoly will sell a lower quantity of goods at a higher price than firms would in a purely competitive market. The GLE was the basis for the Infiniti I30. For a discussion on a monopolist who does not know it, see http://www.economicswebinstitute.org/essays/monopolist.htm where a free software is available as well. The GLE was the "luxury" variant and had 16" wheels.

This procedure assumes that the monopolist knows exactly which is the demand function. The GXE was the "base" Maxima. (the rate of marginal revenue is less than the rate of marginal cost, for maximisation). In this variation, there were three models (GXE, GLE, and SE). marginal revenue = marginal cost, provided. This variant of the VQ30DE was referred to the VQ30DE-K. i.e. The engine was a 222 hp (166 kW) 3.0 L VQ30DE V6.

Setting this equal to zero for maximisation:. The 2000 Maxima (designated A33) was a refresh of the previous car, designed at Nissan's La Jolla, California design studio. Taking the first order derivative with respect to quantity yields:. The Cefiro was sold in the US as the Infiniti I30. Hence its profit is:. For the Japanese market, a Cefiro-badged station wagon was available. The monopoly's revenue is the product of the price and the quantity it produces. This particular generation was sold in Japan as the Nissan Cefiro, which previously was a separate rear wheel drive car.

Let the price it sets as a market response be a function of the quantity it produces (Q) P(Q) and let its cost function be as a function of quantity C(Q). In addition, this version of the Maxima is the most popular with tuners or modders because of its low price and performance parts availability. The monopoly's profit is its total revenue less its total cost. The Maxima SE again made Car and Driver magazine's Ten Best list for 1995 and 1996. The single price monopoly profit maximisation problem is as follows:. This Maxima was Motor Trend's Import Car of the Year for 1995. This difference is known as a deadweight loss. The 4th generation Maxima was highly appraised for its roomy interior.

The economy as a whole loses out when monopoly power is used in this way, since the extra profit earned by the firm will be smaller than the loss in consumer surplus. The North American 1995 Maxima included a Bose sound system on the GLE (optional on the SE) which had a 6 speaker sound system. A formula gives the relation between price, marginal cost of production and demand elasticity which maximizes a monopoly profit: (known as Lerner Index). There were also structural modifications to improve crash worthiness for the 1997 to 1999 models. With an increase of the price the price elasticity tends to rise, and in the optimum mentioned above it will for most customers be above one. The independent rear suspension was replaced with a cheaper torsion bar solid axle. As long as the price elasticity of demand (in absolute value) for most customers is less than one, it is very advantageous to increase the price: the seller gets more money for less goods. Front seat-mounted side impact airbags were added as an option for 1998 and 1999 models.

The profit the monopoly gains is the shaded in area labeled profit. Among interior changes were a different steering wheel and CD player. This is above the competitive price of Pc and with a smaller quantity than the competitive quantity of Qc. The exterior was refreshed for 1997, with clear-lens headlights, a slightly different rear fascia with new taillights, and a chrome grille insert (body color for SE models) was added. This will be at the quantity Qm; and at the price Pm;. The car was redesigned to compete with Toyota's new Avalon. This can be seen on a supply and demand diagram for the firm. Its smooth, powerful acceleration and long-term durability helped the Maxima earn its first "top ten engine of the year" award which it has now been recognized 10 years in a row.

If a monopoly can only set one price it will set it where marginal cost (MC) equals marginal revenue (MR) as seen on the diagram on the right. A new VQ30DE 190 hp (142 kW) 3.0 L V6 was the only engine option. In a pure monopoly market, only the latter effect is at work, and so, particularly for inflexible commodities such as medical care, the drop in units sold as prices rise may be much less dramatic than one might expect. The car was redesigned again in 1995 as the A32. In most real markets, the drop in demand associated with a price increase is due partly to losing customers to other sellers and partly to customers who are no longer willing or able to buy the product. By many Maxima enthusiasts, the J30 model is considered to be the best looking Maxima to date. If they set it lower, they sell more. Unlike later models, the J30 had an independent rear suspension that was absent from the Maxima until the 2004 models.

If they set it higher, they sell less. The Maxima SE was on Car and Driver magazine's Ten Best list for 1990. In contrast, a business with monopoly power can choose the price they want to sell at. All options were available with an automatic transmission only. A price taker cannot choose the price that they sell at, since if they set it above the equilibrium price, they will sell none, and if they set it below the equilibrium price, they will have an infinite number of buyers (and be making less money than they could if they sold at the equilibrium price). It was made available as a choice of three models, the 3.0, 3.0S and 3.0SE. This is in contrast to a price taker that faces a horizontal demand curve. During this year, the Maxima was first introduced to the UK market.

In economics a company is said to have monopoly power if it faces a downward sloping demand curve (see supply and demand). The automatic transmission on all GXE's and optional on SE's was an innovative compact unit from Jatco, featuring four-speed electronic control and adaptive 'sport' and 'comfort' modes that shift at different points. The term is typically used by those who favor laissez-faire capitalism. The SE models can be further distinguished from the GXE by their white-faced guages, twisted spoke turbine wheels, firmer sport suspensions, and optional 5-speed manual transmissions, which weren't offered on the GXE models after 1992. A coercive monopoly is one that arises and whose existence is maintained as the result of any sort of activity that violates the principle of a free market and is therefore insulated from competition which would otherwise be a potential threat to its superior status. The VE30DE engine, plus a limited-slip differential, became standard on the SE models in 1992. Main article: coercive monopoly. In the United States, the VG30E engine was used on all 1989-1994 GXE models, and the 1989-1991 SE models.

A common example is vertical integration of electricity distribution with electricity generation, which is common because it reduces or eliminates certain costly risks. The VG30E was a unit that had been used in the previous line of Maxima, as well as the second-generation Nissan 300ZX. A monopoly arrived at through vertical integration is called a vertical monopoly. It now featured a 160 hp (119 kW) 3.0 L V6, with a 190 hp VE30DE engine available starting in 1992. A magazine publishing firm, for example, might publish many different magazines on many different subjects, but it would still be considered to engage in monopolistic practices if the intent of doing this was to control the entire magazine-reader market, and prevent the emergence of competitors. It was called the '4DSC' by Nissan (4-Door Sports Car) and even had a window decal showing this. Such a monopoly is known as a horizontal monopoly. This is the third generation of the Maxima.

Large corporations often attempt to monopolize markets through horizontal integration, in which a parent company consolidates control over several small, seemingly diverse companies (sometimes even using different branding to create the illusion of marketplace competition). The Maxima was redesigned in 1989 as the J30 model. Practices which these entities may be accused of include dumping products below cost to harm competitors, creating tying arrangements between their products, and other practices regulated under antitrust law. Automatic lapbelts were new options on both the sedan and wagon. Common historical examples arguably include corporations such as Microsoft and Standard Oil (Standard's market share of refining was 64% in competition with over 100 other refiners at the time of the trial that resulted in the government-forced breakup). In late 1986, the 1987 Maxima was introduced with a freshened exterior and interior. Industries which are dominated by a single firm may allow the firm to act as a near-monopoly or "de facto monopoly", a practice known in economics as monopolistic competition. 1988 was the last year for the Maxima station wagon, which had been offered since the Datsun 810 days.

Main article: Monopolistic competition. This Maxima was available with a 157 hp (117 kW) 3.0 L V6 VG30E engine and a 4-speed automatic or 5-speed manual transmission. This may include the ability to charge (to some extent) monopoly pricing, for example in the case of the only gas station on an expressway rest stop, which will serve a certain number of motorists who lack fuel to reach the next station and must pay whatever is charged. In the fall of 1984, the first front wheel drive Maxima was introduced. A local monopoly is a monopoly of a market in a particular area, usually a town or even a smaller locality: the term is used to differentiate a monopoly that is geographically limited within a country, as the default assumption is that a monopoly covers the entire industry in a given country. This was the second Nissan to use US-sourced parts besides the Borg-Warner T-5 transmission used in the Datsun 280ZX Turbo. They say that the idea of "natural monopoly" is mere theoretical abstraction to justify expanding the scope of government, and that, in the case of nationalization or deprivatization, it is the government intervention itself that creates a monopoly where one did not actually exist. The power steering pump was sourced from General Motors' Saginaw Gear division.

Advocates of free markets, such as libertarians, assert that a natural monopoly is a practical impossibility, and, given that a monopoly is a persistent rather than a transient situation, that there is no historical precedent of one ever existing. Powered by the same 2.4 L I6 engine as the Datsun 810 and Datsun 240Z, the car was still rear wheel drive. A natural monopoly industry can also be artificially broken up by government, although (eg electricity liberalization, eg Railtrack) the results are at best mixed. An episode of the MTV show Pimp My Ride featured a Maxima station wagon that Xzibit (the show's host and rapper) referred to as the "identity crisis" since the vehicle sported both Datsun and Nissan badges. Whether an industry is a natural monopoly may change over time through the introduction of new technologies. That was also the year that American Datsuns began carrying the "Nissan" badge as well. Counter-intuitively, the case of a monopolization of a key source of a natural resource is not considered a natural monopoly, because it is based on the running down of natural capital rather than the amortization of an investment in physical or human capital. The car was offered as the 810 Deluxe or 810 Maxima that first year, and all 810s became Maximas for 1982.

It should be distinguished from network effects, which operate on the demand side and do not affect costs. It was essentially a Japanese-market 910 with a 3.9 in longer nose. Natural monopoly arises when there are large capital costs relative to variable costs, which arises typically in network industries such as electricity and water. The first car to wear the Maxima name was introduced in 1981. In these industries monopoly may be more economically efficient than competition, although because of potential dynamic efficiencies this is not necessarily clear-cut. In the film 1980 film Gloria, an 810 was seen as a getaway vehicle after Gena Rowlands murders four hitmen. In these industries competition will tend to be eliminated as the largest (often the first) firm develops a monopoly through its cost advantage. Datsun's new 280ZX shared the 810's chassis, though the 810 did not get that car's larger 2.8 L engine.

A natural pool is a monopoly that arises in industry where economies of scale are so large that a single firm can supply the entire market without exhausting them. The 2-door coupe version was introduced in 1979 along with an exterior refresh, and was available in the Maxima lineup in the Datsun 810 only. Main article: Natural monopoly. The station wagon variant had the rear live axle for load carrying reasons. It is not the result of government granted privilege, subsidies, regulations, etc. These cars were rear wheel drive and had had a semi-trailing arm rear suspension. An efficiency monopoly is one that exists because a firm is satisfying consumer demand so well that profitable competition is extremely challenging. The 2.0 L engine was good for 122 PS JIS (90 kW), while the bigger American engine could reach 125 hp SAE (93 kW).

An example of a "de jure" monopoly is AT&T, which was granted monopoly power by the US government, only to be broken up in 1982 following a Sherman Antitrust suit. The Bluebird Maxima used a carburetor for the base model and fuel injection for the sporty version. A government monopoly may exist at different levels of government (eg just for one region or locality); a state monopoly is specifically operated by a national government. It was powered by two versions of the SOHC L-series I6 engine, a 2.0 L displacement for the Japanese market and a 2.4 L (as found in the Datsun 240Z) for the US market. When such a monopoly is granted to a private party, it is a government-granted monopoly; when it is operated by government itself, it is a government monopoly or state monopoly. The Maxima model line began with the Nissan Bluebird Maxima, which was available in the US as Datsun 810 from February 1977. A monopoly based on laws explicitly preventing competition is a legal monopoly or de jure monopoly. .

sole access to a resource, economies of scale, or consistently outcompeting all other firms. The Maxima debuted in 1976 as an upscale version of the Bluebird and was spun into its own line in 1980, having been made continuously since then. Monopolies are often distinguished based on the circumstances under which they arise; the broadest distinction is between monopolies that are the result of government intervention and those that arise without it e.g. The Nissan Maxima is a car manufactured by Nissan that is in a line of upper midsize executive and sports sedans. . URL accessed on March 25, 2005.. In a monopoly a single firm is the sole provider of a product or service; in a cartel a centralized institution is set up to partially coordinate the actions of several independent providers (which is a form of oligopoly). Edmunds.com.

Monopoly should be distinguished from monopsony, in which there is only one buyer of the product or service; it should also, strictly, be distinguished from the (similar) phenomenon of a cartel. Datsun 810 and Nissan Maxima. Monopolies are characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods. In economics, a monopoly (from the Greek monos, one + polein, to sell) is defined as a persistent market situation where there is only one provider of a kind of product or service. Blocked Entry.

Price Maker. No Close Substitutes. Single Seller.