A monopoly exists when a single supplier dominates the market for a good or service. This gives the supplier power over prices and reduces competition compared to other market structures like perfect competition. Key aspects of a monopoly include barriers to entry that prevent competition, a single seller, and the ability to set prices above costs. Monopolies are often regulated by governments to prevent excess profits and promote fair prices and quality services.

1.  A monopoly is a specific type of economic market structure. A
monopoly exists when a specific person or enterprise is the only
supplier of a particular good. As a result, monopolies are
characterized by a lack of competition within the market producing a
good or service.

2.  “A monopoly is an economic market structure where a specific
person or enterprise is the only supplier of a particular good.”

3.  Perfect monopoly
 Imperfect Monopoly
 Private Monopoly
 Public Monopoly
 Simple Monopoly
 Discriminating Monopoly
 Legal Monopoly
 Natural Monopoly
 Technological Monopoly
 Joint Venture

4.  Ownership
 Status by Government
 Patents and Copy rights
 Mergers

5.  Economies of large scale production
 Limit pricing
 Perpetual ownership of a scarce resource
 High set-up costs
 High sunk cost
 Advertising
 Loyalty schemes and Brand Loyalty
 Exclusive Contracts

6.  A patent is the exclusive right of an investor to use, or to allow
another to use, her or his invention.
 The patent system is designed to encourage innovation.
 Patents raise the price of goods.
Validity:
 A patent is a grant exclusive rights by a government to an investor
for a limited time period.
 A patent is valid for 20 years.
Granted patents:
 Making, importing, offering for sale, selling and using the product.
 Stocking such product for the purpose of offering for sale, selling or
using.

7. Licenses:
 In licensing the government makes potential firms obtain permission
from government in order to perform business.
 Government using its authority to limit entry into industry.
 A license may not grant monopoly but it does block the entry and
often firm gives a monopoly power, which is a power to charge price
above competitive level without losing all their customers.
Grant license:
Government also grant monopoly rights to sell hot
dogs at civic auditorium, provide bus and taxi
services ranging from electricity to cable TV.

8. Federal license:
 Federal licenses give certain firms the right to broad cast radio and
TV signal.
State license:
 State licenses authorized suppliers of medical care, haircuts, legal
advice and many other product.

9.  If a firm has control over the resources for an industry, they can
block entry of other into the market. Control of raw material is
another source of monopoly power is a firms control over some non-
reproducible resources critical to production. Sometimes the source
of monopoly power is a firm control over some resource critical to
production.
For example:
 Alcoa was the sole U.S maker of aluminum from the late 19th
century until world war ll. Its monopoly power initially stemmed from
production patents that expired in 1909, but for the next three
decades, it’s controlled the supply of bauxite, the key raw material in
making aluminum.

10. WAPDA:
 WAPDA means Water and Power Development Authority.
 WAPDA has monopoly of producing electricity.
 WAPDA`s Power Wing is responsible for the planning, construction
and operation of power generation, transmission and distribution
facilities throughout the country, except Karachi area which is
served by KESC (Karachi Electricity Supply Corporation).

11. PAKISTAN RAILWAY:
 Pakistan railway is the state-owned railway company of Pakistan.
 Pakistan railway has a monopoly of rail system.
 Pakistan railways provides an important mode of transportation in
the farthest corners of country and bring them closer for business,
sightseeing, pilgrimage and education.
 Passenger traffic comprises 50% of the railway`s total revenue.
During 1999-2000 this amounted to RS4.8 billion. Pakistan railways
carries 65million passengers annually and daily operates 228 mail
express and passenger trains. The number of passengers carried
daily is thus about 178000.
 Pakistan railway provides transportation facility from area Peshawar
to Karachi.

15. 1. If the demand is elastic, then marginal revenue is
positive.
2. If the demand is inelastic, then marginal revenue is
negative.
3. If demand is unit elastic, then marginal revenue is
zero.

17.  There is a supply curve in a monopolist market, but it is
a little different than normal. Instead of the supply
helping to predict the price, the price is only limited by
demand. The only thing that the supply curve estimates
is the profits the company makes.

20.  Price discrimination is the business practices
of selling the same good at the different prices to different
customer, even though costs for the producing for two
customer are the same.

21.  First degree: the seller must know the absolute
maximum price that every consumer is willing to pay.
 Second degree: the price of the good or service varies
according to quantity demanded.
 Third degree: the price of the good or service varies by
attributes such as location, age, sex, and economic
status.

22.  Definition:
 The government may wish to regulate monopolies to protect
the interests of consumers. Regulated monopolies agree to
adhere to government oversight in order to sustain their monopoly
status.

24.  Monopoly Power
 Market Segregation
 No Resale
Consequences
 More Profit
 More Production

25. Buses fares
 Senior citizens and students are often offered discount
fares on city buses and trains.
Students discounts
 Faculty and staff at colleges and universities might
receives discounts at the campus book store , cafeteria.
Age discounts:
 where the price of a good or admission to an event is
based on age. Age discounts by child, student, adult,
and senior. Examples of places where age discounts are
given include restaurants, movies, and other forms
entertainment.

27. A lower prices for
consumers who buy a
higher quantity. Very
common marketing
technique in book
selling.

28. Some coffee shops offer a
reward to regular
consumers. If you buy
nine coffees, you get the
tenth free. This is a
reward for buying a higher
quantity. For one-off
visitors to a coffee shop,
people are likely to be
less price sensitive.

29. Regulating industries to minimize monopolization and maintain
competitive equality can be pursued in a number of ways:
 Average cost pricing
 Price ceiling
 Rate of return regulations
 Tax or subsidy

30.  As the name implies, this regulatory approach is defined as enforcing a
price point for a given product or service that matches the overall costs
incurred by the company producing or providing. This reduces the pricing
flexibility of a company and ensures that the monopoly cannot capture
margins above and beyond what is reasonable.
Price ceiling:
 Another way a natural monopoly may be regulated is through the
enforcement of a maximum potential price being charged. A price ceiling is
a regulatory strategy of stating a specific product or service cannot be sold
for above a certain price.
Rate of return regulations:
This is quite similar to average cost pricing, but deviates via allowing a model
that can create consistent returns for the company involved. The percentage
net profit brought in a by company must be below a government specified
percentage to insure compliance with this regulatory approach (i.e. 5%).

31.  The last way a governmental body can alleviate a natural monopoly
is through higher taxes on larger players or subsidies for smaller
players. In short, the government can provide financial support via
subsidies to new entrants to ensure the competitive environment is
more equitable.

32.  Prevent Excess Price
 Quality of service
 Monophony power
 Promote Competition
 Natural monopolies

33. PTCL
 Pakistan Telecommunication Company Limited (PTCL) is a mega
corporation and a leading telecommunication authority in Pakistan. The
corporation provides telephonic and internet services nation-wide and is the
backbone for country's telecommunication infrastructure despite arrival of a
dozen other telecommunication corporations, including Telenor
Corps and China Mobile Ltd. They are using the PTCL core network for
international communication.

34.  Pakistan International Airlines is the national flag carrier and a state-owned
enterprise of the Government of Pakistan. Headquartered at Jinnah
International Airport in Karachi it operates scheduled services to 24
domestic destinations and 38 international destinations in 27 countries
across Asia, Europe and North America. Its main bases are at Karachi,
Lahore and Islamabad/Rawalpindi. Secondary bases include Peshawar,
Faisalabad, Quetta, Sialkot and Multan. It today remains by far Pakistan's
largest airline with a fleet of 33 airplanes and at least 20 more on order.

35.  The Water and Power Development Authority (WAPDA) is
a government owned public utility maintaining power and
water in Pakistan. In October 2007, thermal power management
was split into the newly formed Pakistan Electric Power
Company (PEPCO), still WAPDA is considered as one of the
dominant authority in power sector.

36.  The Sui Southern Gas Company (SSGC) was formed in 1954. The
Company in its present shape was formed on March 30, 1989,
following a series of mergers of three pioneering companies,
namely Sui, Karachi Gas Company Limited and Indus Gas
Company Limited. Sui Southern Gas Company is Pakistan's leading
integrated gas company. It has a strong power in Pakistan.

39.  De Beers is the company that dominate the diamond mining,
diamond shops, diamond trading and industrial diamond
manufacturing sectors. De Beers is well known for
its monopoly practices throughout the 20th century, whereby it used
its dominant position to manipulate the international diamond
market.

40.  Intel entered in the semiconductor chip manufacturing industry, the founders and
executive board were filled with ideas as to how they can become the best in their
market. With their innovative ideas, Intel decided to receive patents on their
products to make their technology and ideas untouchable to other competing
companies.

42.  CAMPARISON OF MONOPOLY WITH
PURE COMPETITION

47. • Many independent firms.
• Each seller is small relative to the whole market.
• Homogeneous (identical) product.
• Easy entry and exit (no barriers to entry).

48.  The perfectly competitive firm is said to be a price-taker, because it
takes the market price as given and has no control over the price
because if the firm tried to charge a higher price, it would lose all its
business. Customers could go elsewhere to buy the same product
for less.

49.  The triple equality of productive and allocated efficiency cannot be
seen in monopoly because in monopoly though the monopolist
charges a price at which MC=MR but does not equates price to
marginal cost so in case of monopoly price is greater than MC that
shows the resources are under allocated to this field of production.
The society requires that more of resources should be utilized in this
production but monopolist restricts output and charges high prices.