MONOPOLY The Word Monopoly is a Latin Term. ‘Mono’ means Single and ‘Poly’ means Seller. Monopoly is a form of Market Organization in which there is only One Seller of the Commodity. There are No Close Substitutes for the Commodity sold by the Seller.
Features Of Monopoly1. Single Person or a Firm.2. No Close Substitutes.3. Large Number of Buyers.4. Price Maker.5. Downward Sloping Demand Curve.
Perfect Monopoly It is also called as absolute monopoly. In this case, there is only a single seller of product having no close substitute; not even remote one. There is absolutely zero level of competition. Such monopoly is practically very rare. Bill Gates played Perfect Monopoly in US for MS Word.
Imperfect Monopoly It is also called as relative monopoly. It refers to a single seller market having no close substitute. It means in this market, a product may have a remote substitute. So, there is fear of competition to some extent. e.g. Vodafone is having competition from fixed landline phone service industry BSNL.
Private Monopoly When production is owned, controlled and managed by the individual, or private body or private organization, it is called private monopoly. e.g. Tata, Reliance, Bajaj groups in India. Such type of monopoly is profit oriented.
Public Monopoly A Government monopoly (or Public monopoly) is a form of coercive monopoly in which a government agency or government corporation is the sole provider of a particular good or service and competition is prohibited by law. It is a Monopoly created by the Government. the German Public Train System is entirely government run; there are no private competitors. That is a true Public monopoly.
Simple Monopoly It is also called Single-Price Monopoly. The simple monopolist abides by the “law of one price.” Everyone pays the same market price for all units purchased. Simple monopoly firm charges a uniform price or single price to all the customers. He operates in a single market.
Discriminating Monopoly Such a monopoly firm charges different price to different customers for the same product. It prevails in more than one market. An example is an airline monopoly. Airlines frequently sell various seats at various prices based on demand.
Legal Monopoly It is a monopoly that is protected by law from competition. A government-regulated firm that is legally entitled to be the only company offering a particular service in a particular area. For example, AT&T operated as a legal monopoly until 1982 because it was supposed to have cheap and reliable service for everyone.
Natural Monopoly A type of monopoly that exists as a result of the high fixed or start-up costs of operating a business in a particular industry. Government often regulate certain natural monopolies to ensure that consumers get a fair deal. The utilities industry is a good example of a natural monopoly—Gas , Water, Power.
Technological Monopoly It emerges as a result of economies of large scale production, use of capital goods, new production methods, etc. E.g. engineering goods industry, automobile industry, software industry, etc. Internet Explorer was the only browser available to browse the web between 1995-2000.
Joint Monopoly If two or more business firms acquire monopoly position through amalgamation, cartels, syndicates, etc, then it becomes joint monopoly. e.g. Actually, pizza making firm and burger making firm are competitors of each other in fast food industry. But when they combine their business, that leads to reduction in competition. So they can enjoy monopoly power in market.