OBJECTIVE NUMBER1: TO UNDERSTAND THE MEANING AND CONCEPT OF MONOPOLY
{A} Definition: Monopoly is a market structure in which there is a single seller, large number of buyers ; there are no close substitutes for the commodity it produces and there are barriers to entry. The word monopoly is made up of syllables-mono and poly.Mono means single and poly means seller. In simple words, monopoly is that market situation in which a seller has the sole right over production or sale of product and it has no competitor in the market and no close substitute for its product. The seller in the monopoly market is called monopolist. The monopolist is the sole supplier in the market. The monopolist …show more content…
He has got no competitor.He is the only one who rules the market with his commodity.
As the number of buyers is large in the market , an individual buyer cannot influence the market price. The buyers have no option but to purchase the commodity at the price set by the monopolist.
2)Price maker: The monopolist being the sole seller of the product in the market ,decides the price of the commodity as there is no one to challenge his price. He can also influence the market price by varying supply. Therefore,he is rightly said as the price maker of the commodity.
3)Price discrimination: The monopolist charges different price from different customers. He may charge high price from rich customers and low price from poor customers.
4)Production at optimum scale: The monopolist need not produce much quantity of product, because with the increase in supply , the price might reduce.
5)Restrictions of entry and exit of firm: The monopolist by virtue of his specialities is the sole seller in the market.Other firms due to their weaknesses in one respect or the other can neither enter nor compete with him.The entry of other firms in the market is …show more content…
These places enjoy monopolist rights. The firm may have also full control over locally available raw material.
2)Legal factors: Certain firms have monopolist rights as per the operation of the law.Patent rights to produce and sell certain commodity are given to particular firm.Patent rights are the official recognition that a particular enterprise is the originator of the new product and no one can use their technology without obtaining license from them. Monopoly arises with the patent right. Patent rights are valid for certain number of years which is called as patent life.In India , patent life is of 20 years.
3)Social factors: The democratic and socialistic governments own and control certain economic activities in the public interests.In India , railways and postal departments are owned and controlled by the government. It can be called as social monopoly.
4)Cost factors: The firm enjoys monopoly , if its business has attained large size and highest order of efficiency. The firm will enjoy internal and external economies and other firms cannot compete with
{A} Definition: Monopoly is a market structure in which there is a single seller, large number of buyers ; there are no close substitutes for the commodity it produces and there are barriers to entry. The word monopoly is made up of syllables-mono and poly.Mono means single and poly means seller. In simple words, monopoly is that market situation in which a seller has the sole right over production or sale of product and it has no competitor in the market and no close substitute for its product. The seller in the monopoly market is called monopolist. The monopolist is the sole supplier in the market. The monopolist …show more content…
He has got no competitor.He is the only one who rules the market with his commodity.
As the number of buyers is large in the market , an individual buyer cannot influence the market price. The buyers have no option but to purchase the commodity at the price set by the monopolist.
2)Price maker: The monopolist being the sole seller of the product in the market ,decides the price of the commodity as there is no one to challenge his price. He can also influence the market price by varying supply. Therefore,he is rightly said as the price maker of the commodity.
3)Price discrimination: The monopolist charges different price from different customers. He may charge high price from rich customers and low price from poor customers.
4)Production at optimum scale: The monopolist need not produce much quantity of product, because with the increase in supply , the price might reduce.
5)Restrictions of entry and exit of firm: The monopolist by virtue of his specialities is the sole seller in the market.Other firms due to their weaknesses in one respect or the other can neither enter nor compete with him.The entry of other firms in the market is …show more content…
These places enjoy monopolist rights. The firm may have also full control over locally available raw material.
2)Legal factors: Certain firms have monopolist rights as per the operation of the law.Patent rights to produce and sell certain commodity are given to particular firm.Patent rights are the official recognition that a particular enterprise is the originator of the new product and no one can use their technology without obtaining license from them. Monopoly arises with the patent right. Patent rights are valid for certain number of years which is called as patent life.In India , patent life is of 20 years.
3)Social factors: The democratic and socialistic governments own and control certain economic activities in the public interests.In India , railways and postal departments are owned and controlled by the government. It can be called as social monopoly.
4)Cost factors: The firm enjoys monopoly , if its business has attained large size and highest order of efficiency. The firm will enjoy internal and external economies and other firms cannot compete with