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Chapter 15: Problem 4

An article in the New Yorker noted, "The Bronx [borough of New York City] is home to 1.5 million people, two hundred thousand public-school students, eleven colleges and universities, and a single general-interest bookstore a Barnes \& Noble, located in the Bay Plaza shopping center." The article also noted that this bookstore closed at the end of 2016 . Would the only bookstore in the Bronx, or any other city, be considered a monopoly? If so, why would it have closed?

Short Answer

Expert verified
No, the Barnes & Noble bookstore in the Bronx would not be considered a monopoly despite it being the only general-interest bookstore in that area. This is because there are close substitutes available for the services it provides including e-books, online bookstores, and libraries. It might have closed due to factors like the rise of online shopping, preference for digital reading materials or other alternative sources of obtaining books.

Step by step solution

01

Understand the concept of monopoly

A monopoly is a market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute.
02

Consider the Barnes & Noble situation in the Bronx

Here, Barnes & Noble was the only general-interest bookstore in the Bronx. However, despite being the only bookstore, it wouldn't be considered a monopoly. The reason is that a monopoly exists when there are no close substitutes for a product or service. But in the case of a bookstore, there are close substitutes available. For example, e-books, online bookstores, and libraries.
03

Explain why it closed

As for why Barnes & Noble, which practically enjoyed regional exclusivity, closed down can be attributed to many reasons. One of the major reasons could be the rise of digital retailers and e-books. Physical bookstores have expenses like rent and staff salaries, which makes them less competitive with online stores. Another reason could be that residents of the Bronx might prefer buying books from places other than the bookstore, like convenience stores or preferring online shopping.

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