ABSTRACT
This chapter looks at non-competitive markets. Even as the theory of competitive markets was taking an elegant shape in the 19th century, it was noted that many important markets were not competitive. Adam Smith is both credited and criticised for his views on competitive markets—the so-called invisible hand. Most markets that we deal with as householders are not competitive. To understand their working, we first need to classify them in ways that might help further analysis. Thus the markets of ISPs are confined to the counties or metropolitan areas where they are located. The markets in counties away from large metropolitan areas are small whereas markets in major cities are larger. Incumbent sellers in a non-competitive market make it difficult for new sellers to enter the market. This is done by setting up difficulties generally known as entry barriers. Restricting the entry of rival companies into the market and unfairly blocking their business operations are called anti-competitive or restrictive practices.
