Monopolistic competition is an economic model with a market structure in which corporations functioning in firm produce similar commodities or services, but when likening the two, they have slight variations. Nevertheless, this variations make each entity have an elevated competitive advantage over the other. Precisely, industries working in areas such as healthcare lack monopolistic benefits causing each of the companies to operate each of their business activities autonomously without the control of other firms. Additionally, monopolistic economic models causes the development of imperfect rivalries structures in which the firm has many players with the lack of capabilities to exist as price takers. Anthem Inc. is an example of an American medical insurance corporation which uses monopolistic economic model to maintain its viability in a highly competitive firm. Anthem Inc.’s competition aims to maintain efficiency while still keeping their fees lower and quality of patient wellness higher.
Nevertheless, because of free entries in the medical insurance industry, Anthem Inc. experiences a backlog of competitive pressures. For this reason, Anthem Inc. is forced to apply monopolistic competition in their corporation by engaging in product differentiation activities in order to match their rivals’ energy. Moreover, higher medical insurance coverages in nations like USA has resulted to high demand for health care commodities and amenities oblivious to price variations. Therefore, this frameworks has caused corporations like Anthem Inc. to aim on output with lesser concentration on price of the amenities offered to the customers because customers will likely pay for the services. Also, Anthem Inc. as a monopolistic competitors are aware that market powers originates from the exceptionality of the services and the commodities they offer their clients. Thus, they have aimed to create an important brand name for themselves and elevate their markets by differentiating their services in the healthcare industry.
References
Sava, D. (2021). Types of Markets Within the Healthcare Systems; Examples from Balkan and East European Countries. In Global, Regional and Local Perspectives on the Economies of Southeastern Europe (pp. 327-341). Springer, Cham.
