introduction of monopoly,types of monopoly,advantages and disadvantages of monopoly,indian railway case study

1. MONOPOLY

2. MEMBERS
Rucheer Goregaonkar 23
Sanket Gawali 37
Paresh Prabhulkar 19
Prajakta Mandhare 16
Manish Tiwari 51
Atul Palve 34

3. INTRODUCTION
COMBINATION OF TWO WORDS:
MONO ONE
MONOPOLY
POLY CONTROL
• Refers to a market situation in which there is only one seller of a commodity
• Power to set the price
• Monopolist may be a king without a crown.

4. “ONE
MAN
RULE”

5. DEFINATION
Monopoly is a market situation in which there is a single seller. There are no close substitutes of
the commodity it produces, there are barriers to entry”. -Koutsoyiannis
Features of Monopoly
Single seller
No close substitute
Unique product
Price maker
Entry barrier
Eg. In Saudi Arabia the government has sole control over the oil industry
By branding, Copyrights, patents there can be no creation Perfect substitutes

6. EXISTENCE OF MONOPOLY
 True monopoly generally exists in government controlled markets
 E.g. Indian Railways
 Monopoly in private business is rare
 Private firms who have considerable market shares may enjoy
monopoly
 E.g. Microsoft, Intel, Google,

7. TYPES OF MONOPOLY
 PRIVATE MONOPOLY: -
The monopoly firm owned and operate by private
individuals is called the private monopoly. Their main
motive is to make profit.
 PUBLIC MONOPOLY: -
The monopoly firm owned and operated by public or state
government is called public monopoly Their main motive is to
provide welfare to the public.
 ABSOLUTE MONOPOLY: -
It is a type of monopoly, where a single seller controls the
entire supply of market without facing competition. It is
also known as pure monopoly.

8.  Discriminative monopoly:
When a monopoly firm changes different prices for the same goods
or services to different consumers it is known as discriminative
monopoly.
 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.
 Natural monopoly:
When a firms enjoys monopoly right due to natural factors like location
reputation earned etc, it is called as natural monopoly.
 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.

9. ADVANTAGES AND DISADVANTAGES
Advantages
 Monopoly avoids duplication and hence
avoids wastage of resources
 A monopoly enjoys economies of scale of
product or services in market
 Sources of revenue for the government as
government gets revenue from of taxation
 Earning of huge profit led monopoly to
invest in R&D and provide us new product
Disadvantages
 Poor level of services
 Consumers may be charged high price for
low quality of goods
 Lack of competition may lead to low
quality and out dated goods and services
 Loss in R&D may force them to revert the
profit from consumer

10. APPLICATION OF MONOPOLY
 Example Indian railway
 Monopoly in its segment
 Government , is the only seller
 No close substitute for railway in market
 Barriers to entry in market(capital, requirement, technology)