Monopoly

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Monopoly

  1. 1. MONOPOLYPRESENTED BY:ZARMINA SHER
  2. 2. What is Monopoly?• The only seller of a product that hasntbeen duplicated.
  3. 3. Example1. Shimano,2. YKK ( Waikeikei),3. Nidec,4. Mabuchi,5. Debeers diamonds6. Intel
  4. 4. Characteristics• Single seller,• Unique product,• Barriers to entry• Price maker• Non-price competition
  5. 5. Barriers to Entry•Economies of scale,•Legal barriers: Patents, Copyright, License, Franchise,•NetworkExternalities:
  6. 6. Types• Natural monopoly,• Geographic monopoly,• Technological monopoly,• Government monopoly,
  7. 7. Causes of monopolyWhat arethe causesofmonopoly?
  8. 8. Why Monopolies can be beneficial?Research and Development.Economies of scale.International Competitiveness.Monopolies Successful Firms.Advantages Of Monopoly
  9. 9. Types of profit in monopoly.• Normal profit• Supernormal profit• Sub normal profit
  10. 10. Normal profitAR = AC monopolist will get normal profit
  11. 11. Supernormal profitAR>AC monopolist will get supernormal profit
  12. 12. Sub-normal profitAC > AR monopolist will get Sub- normal profit
  13. 13. Price and output under pure monopolyThe monopolists demand curve constraintson monopoly
  14. 14. Price and output under pure monopolyA change in demand will cause a change inprice, output and profit.
  15. 15. Price discriminationDifferent customers charged differentcharges
  16. 16. Conditions on price discriminationMonopoly powerElasticity of demandsSeparation of the market
  17. 17. Examples of price discrimination• Cinemas and theaters,• Student discounts,• Car rental firms,• Hotels ,
  18. 18. Aim of price discriminationTo increase the total revenue.Extract consumer surplus and turn itinto producer surplus
  19. 19. Thanks you

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