Luxottica owns 11 glasses and sunglasses companies. They also have deals to make glasses for at least 20 other brands. In 2017 Luxottica joined with Essilor, another major glasses company. (optional; the Adam ruins everything episode about Luxottica) The new company, EssilorLuxottica, is worth $81 billion and made $11 billion in sales in 2019. It is estimated they control at least 80% of the market for name-brand glasses. EssilorLuxottica makes the glasses and also owns the major retail sellers of glasses including LensCrafters and Sunglass Hut. In the case of LensCrafters, they own the largest chain of eye doctors that prescribe their products. Furthermore, they also own some of the major optical (eye) insurance companies. Effectively the only way to sell glasses in the USA is through retail stores owned by EssilorLuxottica. When Oakley became a popular brand of sunglasses Luxottica stopped selling them in their stores. Oakley could not sell their glasses and became worth so little as a company Luxottica bought them... Today glasses often cost more than $300 a pair and the cheapest pair is often over $200. In 2019 a former LensCrafters executive admitted their glasses had a nearly 1,000% mark up over the cost to make them. What type of market structure is Example 1? Use at least 2 details from the text in your explanation.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Transcribed Image Text:Luxottica owns 11 glasses and sunglasses companies. They also have deals to make glasses for at least 20 other brands. In 2017 Luxottica joined with Essilor, another major glasses company. (optional; the Adam ruins everything episode about Luxottica) The new company, EssilorLuxottica, is worth $81 billion and made $11 billion in sales in 2019. It is estimated they control at least 80% of the market for name-brand glasses. EssilorLuxottica makes the glasses and also owns the major retail sellers of glasses including LensCrafters and Sunglass Hut. In the case of LensCrafters, they own the largest chain of eye doctors that prescribe their products. Furthermore, they also own some of the major optical (eye) insurance companies. Effectively the only way to sell glasses in the USA is through retail stores owned by EssilorLuxottica. When Oakley became a popular brand of sunglasses Luxottica stopped selling them in their stores. Oakley could not sell their glasses and became worth so little as a company Luxottica bought them.. Today glasses often cost more than $300 a pair and the cheapest pair is often over $200. In 2019 a former LensCrafters executive admitted their glasses had a Inearly 1,0000% mark up over the cost to make them. What type of market structure is Example 1? Use at least 2 details from the text in your explanation.

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