MONOPOLY

1. Monopoly
Sanjana.S
MBA 2nd Batch
2020

2. Market Structures

3. Monopoly
Derived from two Greek words
▪ Monopoly means an existence of a single seller or a producer who
sells or produces a product which has no close substitutes.
▪ exists when a specific person or an enterprise is the only supplier
of a particular commodity.

4. Features or Assumptions
▪ Single Seller and a Large Number of Buyers
▪ Absence of Close Substitutes
▪ Restriction on the Entry of New Firms
▪ Price Discrimination
▪ Full Control Over Price
▪ Firms and Industry

5. Causes Of Emergence Of Monopoly
The fundamental cause of Monopoly is the Barriers to Entry.
Barriers to Entry have three sources
 Control of Resources
DeBeers Company
 Government Control
Licensing and Patent Rights
 Cartels
OPEC

6. A Monopoly’s Revenue
▪ AR and MR curves are
downward sloping.
▪ MR is less than AR

7. Merits and Demerits
Merits
High Level of Efficiency.
Research and Development.
Demerits
Less Output.
High Price.
Concentration ofWealth.

8. Examples of few Monopoly
Indian Railways Hindustan Aeronautics Limited Coal India
Microsoft Google ITC