two companies that operate as a monopoly. Discuss the items and/or services that the companies sell and explain how it sets the selling price. Would you change the price if you were running the company? Explain
Two companies that operate as a monopoly are in business of manufacturing and supplying jet engines for large commercial planes. The companies are General Electric and Roles Royce. They provide jet engines to companies manufacturing commercial airplanes. In addition, they provide services to repair and overhaul these engines after they have been in service.
They set their selling price through an unpublished price list. Although customers are not privy to these priceless, the companies internally compare these priceless and update them so none of the parties is hurt by other company's offerings. This way prices of both companies remain comparable.
If I were running the company I would use the same system so that both companies benefit from this approach by artificially maintaining the prices and their profits.
Mar 10th, 2015
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