The Free Market: Competition, Monopolies, and the Dynamics of Innovation

Learn about the free market, competition, and how monopolies can hinder economic growth, in this 5:01 minute long video lesson.
In a free market, unlimited human wants often meet sellers with limited supplies. In such a place, competition is usually a force of good. It leads to more choice, increases the quality of products on offer and reduces their prices. If competition is absent, monopolies can form. And that's a problem. Learn about the basic benefits of competition.

SUPPORT us in creating more videos about free market economics ❤️

DOWNLOAD video without ads and background music 🤫

SIGN UP to our mailing list and never miss a new video from us 🔔

SOURCES and teaching resources 🎓

VISIT our website 🌐:

CONTRIBUTE by upvoting your favorite topic or suggesting new ones☑️ :

THANKS to our patrons

COLLABORATORS
Script: Jonas Jaquet and Jonas Koblin
Script Editor: Morgan Lizop
Fact-checking: Ludovico Saint Amour Di Chanaz
Artist: Pascal Gaggelli
Voice: Mithrilda
Coloring: Nalin
Editing: Peera Lertsukittipongsa
Sound Design: Miguel Ojeda
Production: Selina Bador

SOUNDTRACKS
Tarantella - Adieu Adieu

DIG DEEPER with these top videos and articles:
Listen to the insights of former Uber’s chief economist John List and learn why competition makes it so difficult for Uber to increase the money their drivers earn — even adding tips didn’t work.

Read about Uber's surge pricing in this case study.

Read about cartels and why it's good for society to have strong laws that fight them.

Competition, and good overview by Wolfgan Kastper from the Econlib

Play Monopoly or Catan to learn how demand, supply and monopolies lead to winners and losers.

SOURCES

CLASSROOM ACTIVITY
Visit our website to learn more about suggested active learning activity on this topic!

CHAPTER
00:00 Introduction
00:21 The definition
01:00 The full story
01:15 Competing on price
01:44 Non-price competition
02:12 Free market scenario
02:41 Spectrum of competition
03:18 Monopoly
03:46 Summary
04:06 Tell us how you would compete
04:34 Patrons credits
04: 43 Ending

#sproutslearning #economics #competition #price #monopoly

[ShawnRavenfire]

The problem with government intervention is that it works both ways. While anti-trust laws have done good work to break up past monopolies, modern corporate bailouts tip the scales in favor of established business over startups.

[carynpinkston]

I live in a small town with only two grocery stores nearby. One is big enough that it can generally supply our grocery needs, and the other is a tiny store that sells good meat, but it's selection is otherwise lackluster (and I don't trust those non-meat groceries besides - I once opened a yogurt I bought from them as I was walking out and found mold). The bigger grocery store practically has a monopoly where I live, so they can do pretty much whatever they want with the prices. It's such a pain! We have a choice of either paying unfair prices for our groceries, or going out of town to buy them (which we can't always do during the winter). Not only that, but this grocery store sells us produce that goes bad almost immediately, and we actually buy it, because we don't really have other options. I wish that our local grocery store had some real competition, or that they'd get in legal trouble for their practices.

[MrMastera]

Everything works well in theory but in reality there are many other factors like corruption and organized crime that not only inevitably lead to a monopoly, but also choke small and medium businesses until their owners sell them out to the big fish.

[readisgooddewaterkant]

Watching a video on the value of competition
On youtube, The video watching monopoly

[omerkaya]

I think anti-trust laws are anti free market.

I believe that the only threat a company poses is if it can get special treatment from a government, ban competition etc.

I don't see any other way how a company could worsen my life.

[perafilozof]

The only problem is : Companies that gain Monopoly, gain almost unlimited money, and money corrupts those in government which than don't brake up monopiles to prevent their income from being lost. Human greed and corruption always ruins everything.

[escuelasestelares]

The human factor has been left out. A greedy person is not concerned with the common good. Thus competition becomes a way to exploit, to cheat, to lie, etc. For instance, in the banana example; nowadays the bananas in the market in the county I live, have lost their taste, their quality as a source of nourishment. Producers have found a way to produce more, to add deceitful labels to those bananas (i.e organic) to preserve them longer than their typical shelve lifetime with additional chemicals, etc. Even though, we see a banana, it is not what it used to be, nor is the quality of the land where those bananas grow. All of that thanks to competition. Many times we can be lost with labels such as "monopoly, " "free market, " etc. We may take side with a label only and even idealistically fight for that label, when the reality behind it is more complex. However, the bottom line, the source beyond labels is the quality of a person. Each person makes up society, and thus; the "aggregate value" of quality of people will give those labels their real meaning.

[joshuasbecreative]

Awesome video
good job on the explanation

[avonzo]

For a true competition to work a good governance framework has to back it up because biased support in the market would ruin the intended higher quality for the consumer.

[Munchausenification]

In general competition is overall a net gain for society in the long run, but not always. For example milk or other dairy products only get cheaper and overall quality goes up with higher production capacity and therefore a monopoly in this case is most of the time actually better in the end. The company called Arla is a good example of this, where the company does not have complete monopoly but close to it, in Denmark. It should also make it easier on a macro level to reduce waste in that milk products isnt something we buy 50% more of when on sale, our consumption stays pretty much the same. But despite this there are also downsides. Innovation could potentially be lower, suppliers have very little room for price negotiation - potentially leading to inflexible supply-side, the company is an expert on the homefront but an amateur in more aggressive markets.

[pueraeternus]

The banana monopoly competes with the apple, orange, and pineapple monopoly though. Just because there's only one company making a product doesn't mean there's a lack of competition and innovation. A monopoly has to be larger than a specific product, it has to be an entire industry. Facebook isn't a monopoly.

[RealSalica]

Yeah and we ended up with too much variety, farmers working for almost no money (search for suicides in farmers) and a higher amount of food waste because when there are too many options of the same product and grocery stores want to offer them all to the consumers ...well a lot don't get sold .

[cheungchoiwan]

agree for free and healthy competition.

[bigdawg]

AMD do both on their Cpu product; Advanced the innovation and give the price not only competitive but also way cheaper

[kajolk]

Hey Guys, Loved your illustration style! Very clear narrative and storytelling. Can you mention the tool used to draw all these?

[rcfokker]

You need a Monopoly, in order to 'break up' other Monopolies?

[samoelcerv]

i am all in for the competition, but
in a world where everyone is an enemy, only the strong survive and they will thrive.
so it is not like everyone benefits from competition, we get better stuff but many fail to get a profit, because someone else has more money to use, to get more profit.

[ahmedsaqawemaki]

I hope in the next videos to talk about the ideas of:
-Guerrela marketing and
-Grassroots marketing

Thanks.

[KitagumaIgen]

Competitive market mechanisms and supply and demand-driven pricing doesn't work for computer software products.

[OmerE.C]

Monopolies are not always bad. And competition is not always good, we need a good balance of these