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Managerial Economics - Market Structure

Monopoly Market - Market Structure

   Posted On :  29.05.2018 09:14 pm

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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