when the iphone was initially introduced by apple the company had substantial market power as it essentially defined the smartphone and app market with the launch of the product for a short period of time it had a monopoly 
at the time the cost to procure an iphone was high and could remain so because of a lack of rival devices thus iphone prices were set initially by apple and not by the marketplace even as the first competitor smartphones emerged the iphone continued to represent the high end of the market in terms of pricing and expected quality as the rest of the industry began to catch up in service quality and availability of apps apple s market power diminished the iphone did not vanish from the market as more entrants arrived apple began to offer new models of iphones in multiple variations including less expensive models targeted at more budget minded consumers monopsonies are markets where one buyer has all the market power this concept was developed by economist joan robinson in the 1933 book the economics of imperfect competition power structures of marketsthere are three basic marketplace conditions that exist in terms of market power as applied to either an overall economy or a marketplace for a specific item the first is the previously noted ideal condition of perfect competition with perfect competition in addition to a number of companies producing the same or a similar product there are also minimal or no barriers to new companies entering the marketplace agricultural markets are often pointed to as examples of relatively perfect competition markets since it is nearly impossible for anyone producer of an agricultural commodity to gain a substantial amount of market power the opposite of perfect competition conditions is a monopoly in which one company completely controls the market for a product or service or at least a portion of the total market and is able to adjust pricing at will limited monopolies are often allowed for utility companies but their ability to raise prices is usually limited by government authority an oligopoly refers to a marketplace dominated by a small number of companies and in which there are substantial barriers to new entrants in the market the companies in an oligopoly generally have combined but not an individual market power an example of oligopoly is the market for cellphone service controlled by a relatively small number of firms in which large barriers to new entrants exist 