The document discusses the concept of monopoly in market structures, defining it as a situation where a single seller controls the market without competition or close substitutes. It outlines various types and causes of monopolies, including natural, legal, and technological monopolies, as well as the disadvantages such as poor service and consumer exploitation. The document also offers lessons for business managers on managing risks and the importance of negotiation and diversification.

2. Market Structure
Imperfect
competition
Monopoly
Monopolistic
competition
Oligopoly Duopoly
Perfect
competition

3. INTRODUCTION
Derived from two Greek words:
“Monos” means single
“Poly” means seller
Monopoly is a term used by economists to refer to the
situation in which there is a single seller of a product (i.e., a
good or service) for which there are no close substitutes.
Monopolies exist because of barriers to entry into the market
that prevents competition.

4. FEATURES
• Single seller
• No Close Substitutes
• No Entry for New Firms
• Price-discrimination
• Firm is a Price-Maker

5. CAUSES OF MONOPOLY
1. Natural
2. Technical
3. Legal
4. Large Amount of Capital
5. State

6. TYPES OF MONOPOLY
1. Private monopoly:
The monopoly firm owned and operate by private individuals is called the private
monopoly. Their main motive is to make profit.
2. Public monopoly:
The monopoly firm owned and operated by public or state government is called
public monopoly.
3. Absolute monopoly:
It is a type of monopoly, where a single seller controls the entire supply of market
without facing competition.
4. Imperfect monopoly:
It is a type of monopoly in which a single seller controls the entire supply of the
market which does not have a close substitute. But there might be remote
substitute for the product available in the market.

7. 5. Simple or single monopoly:
It is a type of monopoly in which a single seller controls the entire market, by
selling the commodity at a single price for all the consumer.
6. Discriminative monopoly:
When a monopoly firm changes different prices for the same goods or services to
different consumers it is known as discriminative monopoly.
7. Legal monopoly:
When a firms enjoys rights like trade mark, copy right, patent right, etc. then it is
known as legal monopoly. Such monopoly rights are approved by the government.
8. Natural monopoly:
When a firms enjoys monopoly right due to natural factors like location reputation
earned etc, it is called as natural monopoly.
9. Technological monopoly:
When a firm enjoys monopoly power due to technical superiority over other products
in the market, then it is called as technological monopoly.

8. MONOPOLY REVENUE CURVE

9. Disadvantages of monopoly
1. Poor level of service.
2. No consumer sovereignty. A monopoly market is best known for
consumer exploitation. There are indeed no competing products and as a
result the consumer gets a raw deal in terms of quantity, quality and
pricing.
3. Consumers may be charged high prices for low quality of goods and
services.
4. Lack of competition may lead to low quality and out dated goods and
services.

10. DIFFERENCE BETWEEN MONOPOLY
AND PERFECT COMPETITION

11. LESSONS OF MONOPOLY FOR
BUSINESS MANAGERS
1. Risks should be taken early whenever possible.
2. Negotiation and persuasion skills are essential.
3. Diversification is key.
4. Money should be set aside for uncertainties.
5. Always understand ROI.
6. Instant gratification isn’t always what’s best.