The document discusses monopoly and provides examples of monopolies in industries like electricity and railways in India. It defines monopoly as a market situation with a single seller and barriers to entry. The key features of monopoly discussed include there being one seller and many buyers, restrictions on new firms entering the market, and the seller having the ability to set prices. The document outlines causes of monopoly power, effects of price discrimination, benefits and negative aspects of monopoly, and suggestions for how governments can regulate monopolies to prevent exploitation of consumers.

1. 1
ECONOMICS
RESEARCH
ON
MONOPOLY

2. 2
Topic selection
I felt MONOPOLY is best topic to
research on because in today’s era
Monopoly has increased its market
widely. Let’s take some example
like Our electricity supply from
one agency, i.e., State Electricity
board; we travel by railway i.e.
owned and run by the Government
of India.

3. 3
All these examples are of Monopoly.
This is the situation of market
where single(mono) firm
controls(poly) the production of
commodity is called monopoly.
According to Koutsoyiannis,
”Monopoly is a market situation in
which there is a single seller ,there
are no close substitutes for
commodity it produces, there are
barriers to entry.”
INTRODUCTION
Monopoly is a market situation
in which there is a single seller,

4. 4
there are no close substitutes for
commodity it produces, there are
barriers to entry.
A form of the market in which
the only seller of a commodity
has full control over price is
Pure Monopoly.
FEATURES
(1)One seller and large no. of
buyers
(2) Monopoly is also an industry

5. 5
(3) Restrictions on the entry of
the new firms
(4) No close substitutes
(5) Price maker
(6) Price discrimination
CAUSES OF MONOPOLY POWER
(1) Control over raw material
(2) Patents
(3) Technical barriers
(4) Government policy

6. 6
(5) Capital size
(6) Historical or entry lag
EFFECT OF PRICE DISCRIMINATION
(1) To the poor
(2) Public utility services
(3) Full utilization resources
(4) Harmful effects:
(5) No proper use of factors of
production
(6) Less production

7. 7
BENEFITS
(1) Monopoly avoids duplication
and hence wastage of resources.

8. 8
(2)A monopoly enjoys economics of
scale as it is the only supplier of
product or service in the market.
The benefits can be passed on to the
consumers.
(3)Due to the fact that monopolies
make lot of profits, it can be used
for research and development and
to maintain their status as a
monopoly.
(4) Monopolies may use price
discrimination which benefits the
economically weaker sections of the
society. For example, Indian

9. 9
railways provide discounts to
students travelling through its
network.
(5)Monopolies can afford to invest
in latest technology and machinery
in order to be efficient and to
avoid competition.

10. 10
NEGATIVE ASPECTS
(1)Poor level of service.
(2)No consumer sovereignty.
(3)Consumers may be charged
high prices for low quality of
goods and services.

11. 11
(4)Lack of competition may lead
to low quality and out dated
goods and services.
(5)Monopoly is that seller is the
price maker which gives seller
undue advantage of charging
exorbitant or unfair price for
the product leading to
exploitation of consumers as
they have no option but to buy
it from seller as there is no
competitor of the seller in
monopoly market.

12. 12
(6)Monopoly is that firm may
resort to discrimination pricing
that is charging different prices
from different customers which
will lead to dissatisfaction
among consumers as same
product will be priced
differently for different
markets or consumers; hence
there is no transparency in
case of monopoly.
(7)In case of monopoly in the
absence of any competition
there is tendency of the seller

13. 13
to be complacent which in
turn leads to seller selling low
quality products and providing
poor customer service as
customer has no choice because
there are no substitutes due to
lack of competition.
As one can see from the above that
monopoly has both advantages and
disadvantages, however majority of
the governments as well as
consumers all over the world don’t
prefer pure monopoly market
structure because most of the times

14. 14
it leads to exploitation of
consumers by monopolist.
SUGGESTIONS

15. 15
By lowering the output and raising
the price of his product, a
monopolist can exploit the society.
Consequently, government in each
country keeps the activities of the
monopolist well under-control.
Monopoly can be controlled and
regulated in the following
manner:-
(1)Anti-Monopoly Legislation:-
Monopoly power can be
restricted by enacting anti-
monopoly legislations. Such
legislative measures prevent

16. 16
monopoly firms from coming
into existence.
(2)Maintenance of fair
competition:-
Monopoly power comes into
being when it is not opposed by
any real or potential
competition.
(3)Price and Output Control
Measures:-
Monopoly is also criticized
because under it, more price is

17. 17
charged and less output is
produced than under perfect
competition.
(4)Purchasers’ Association:-
Setting up for cosumers’ forums
has been advocated to enhance
the bargaining capacity of the
purchasers.
(5)Publicity:-
Adverse propaganda will create
fear in the mind of the
monopolist and he will desist

18. 18
from practicing objectionable
and improper methods.
(6)Through Subsidies and Taxes:-
Government these days impose
heavy restrictions on the
exploitative tendencies of the
monopolist.

19. 19
THANKYOU

20. 20