Mono means single, poly means seller and hence monopoly is a market structure where only one sells the goods and many buyers buy the same.
Monopoly Market
Mono means single, poly means
seller and hence monopoly is a market structure where only one sells the goods
and many buyers buy the same. Monopoly lies at the opposite extreme from
perfect competition on the market structure continuum. A firm produces the
entire supply of a particular good or service that has no close substitute.
Characteristic Features:
1. A single
seller in the market
2. There are
no close substitutes
3.
There is a restriction for the
entry and exit for the firms in the market
4. Imperfect
dissemination of information This does not mean that the
monopoly firms are large in size. For example a doctor who has a clinic in a
village has no other competitor in the village but in the town there may be
more doctors. Therefore the barrier to the entry is due to economies of scale,
economies of scope, cost complementarities, patents and other legal barriers.
Tags : Managerial Economics - Market Structure
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