A natural monopoly is a type of monopoly that comes into existence when the seller pays a high price for setting up or conducting the business. It can also be seen in an industry which requires unique raw material, technology to operate. Hence, a monopoly based on sole state ownership of production and distribution network is known as the natural monopoly.
In trade, barter (derived from baretor) is a system of exchange where participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money.
Consumers and producers determine the price of commodity. consumer occupy a pivotal place in the economic activity he is an agent who consumes goods or services for satisfaction of his wants.THE SATISFACTION OF WANTS IS THE THE BEGINNING AND END OF ALL ECONOMIC ACTIVITIES. The objective of consumer is to get maximum satisfaction from expenditure incurred on various goods and services.Therf... moreore,CONSUMER BEHAVIOUR is rhe behaviour in which the consumer spends his limited income on various goods and services in such a way that he obtains maximum satisfaction
The producer will be in equilibrium when he is earning maximum profit. According to MC-
MR approach, producer strikes his equilibrium when two conditions are satisfied
(a ) MC = MR, and
(b) MC curve must cuts MR curve from below or MC curve should be rising.
Explanation of Conditions
(i) So longs as MC is less than MR, it is profitable for the producer to go on pro... moreducing more
because it adds to its profits. He stops producing more when MC becomes equal to MR.
(ii) When MC is greater than MR after equilibrium it means the profit will decline if producer
will produce more units of the good.
(iii) Hence the level of output where marginal revenue and marginal cost are equal is the point of