Because these all controlled by the monopoly firm only.Ĭharges high prices when compare to all markets. May restrict the supply of goods which cause the market fluctuation and lead to raise price.Ĭonsumer choice is restricted in the case of price, quality and quantity. Special knowledge so it can produce a new or better product that others can't imitate Special knowledge so it can produce the same product cheaper Example Sony corporation is the monopoly in the Walkman technology in mobile phones. Producer may have scarce raw material, patent rights, and secret methods of production. Example Gas production, Oil extraction and power generation. Where existence of many firms may misuse the resources and control by many firms over public utilities leads to clashes. Government may grant license to any one person or firm only to operate in the case of public utilities. Eg: municipal water supply and power supply by APTRANSCO. When production is solely and operated by state or government it is called public or social monopoly. When an individual or private person controls a firm it is called private monopoly. Sole producer who charges different prices: a sole producer who divides the buyers' market and charges different prices to different customersĥ) Private monopoly public or social monopoly In the case of simple monopoly, price is charged uniformly to all customers without any discrimination. No other motor company has the right to use DTS-i technology in the manufacturing of engines. And it has taken patent rights for this technology. Example Bajaj Motors Company has the technological monopoly in the DTS-i bike engine technology. Generally big forms have technological monopoly. For example, if a company develops and patents a drug to cure brain cancer, that company has a legal monopoly over that drug. Technological monopolies occur when the good or service the company provides is has legal protection in the form of a patent or copyright. Imperfect monopolist has to worry about is losing customers to producers of distantly related products. We will simply note that because the pure monopolist does not have to worry about competitors in reducing price, it can raise its price without fear that customers will not move to other producers of the same product or similar products In the case of imperfect monopoly there are close substitutes. Pure monopoly there will be a single seller of a product for which there are no close substitutes. A monopoly may also form when a company has a copyright or patent that prevents others from entering the market. Its demand curve slopes downward to the right.For example, in Saudi Arabia the government has sole control over the oil industry. ![]() He determines the price and this price will determine how much he is able to sell. The firm is the industry since it is the only producer in the market. In monopoly, there is no distinction between firm and industry. Furthermore no other seller can enter the market. State Electricity Board you travel by railway train owned and run by government of India. ![]() ![]() For example, you get your electricity supply from one agency, that is. Since the monopoly is the only seller in the market, it has neither rivals nor direct competitors. Thus, pure monopoly is market structure in which a single firm is the sole producer of a product for which there are no close substitutes. The term monopoly is derived from the Greek word monopolin which means exclusive sale.
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