— According to Koutsoyiannls, "Monopoly is a market situation in which there is a single seller, there are no close substitutes for commodity it produces, there are barriers to entry." Show
— In the words of Baumol, "A pure monopoly is defined as the firm that is also an industry. It is the only supplier of some particular commodity for which there exists no close substitute." 1) Pure monopoly and imperfect monopoly Pure monopoly there will be a single seller of a product for which there are no close substitutes. It will have absolute monopoly power. We will simply note that because the pure monopolist does not have to worry about competitors in reducing price, it can raise its price without fear that customers will not move to other producers of the same product or similar products In the case of imperfect monopoly there are close substitutes. It has no absolute monopoly power. Imperfect monopolist has to worry about is losing customers to producers of distantly related products. 2) Technical monopoly Technological monopolies occur when the good or service the company provides is has legal protection in the form of a patent or copyright. For example, if a company develops and patents a drug to cure brain cancer, that company has a legal monopoly over that drug. Generally big forms have technological monopoly. Example Bajaj Motors Company has the technological monopoly in the DTS-i bike engine technology. And it has taken patent rights for this technology. No other motor company has the right to use DTS-i technology in the manufacturing of engines. 3) Simple monopoly In the case of simple monopoly, price is charged uniformly to all customers without any discrimination. 4) Discriminating monopoly Sole producer who charges different prices:a sole producer who divides the buyers' market and charges different prices to different customers 5) Private monopoly public or social monopoly When an individual or private person controls a firm it is called private monopoly. When production is solely and operated by state or government it is called public or social monopoly. Eg: municipal water supply and power supply by APTRANSCO. A firm is a monopoly if it is the sole seller of its product and if its product does not have close substitutes. The fundamental cause of monopoly is barriers to entry: A monopoly remains the only seller in its market because other firms cannot enter the market and compete with it. Barriers to entry, in turn, have three main sources:
Disadvantages of monopoly market
Advantages of monopoly market
In which market model would there be a unique product for which there are no close substitutes?A monopoly occurs when a single company that produces a product or service controls the market with no close substitute.
What is monopoly and oligopoly?Monopoly is defined by the dominance of just one seller in the market; oligopoly is an economic situation where a number of sellers populate the market.
In which market structure does one firm sell a good or service with no close substitutes and there is a barrier blocking the entry of new firms?A monopoly consists of one firm that produces a unique product or service with no close substitutes. Entry into the market is blocked, which gives the firm market power (i.e., the power to raise price above marginal cost).
In which market model is there no control over price?A market structure in which a very large number of firms sell a standardized product into which entry is very easy in which the individual seller has no control over the product price and in which there is no nonprice competition; a market characterized by a very large number of buyers and sellers.
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