B Com Exam > B Com Questions > Explain the monopoly? Write down features and...
Start Learning for Free
Explain the monopoly? Write down features and types of monopoly?
Verified Answer
Explain the monopoly? Write down features and types of monopoly?
Definition: The Monopoly is a market structure characterized by a single seller, selling the unique product with the restriction for a new firm to enter the market. Simply, monopoly is a form of market where there is a single seller selling a particular commodity for which there are no close substitutes.
Features
Under monopoly, the firm has full control over the supply of a product. The elasticity of demand is zero for the products.
There is a single seller or a producer of a particular product, and there is no difference between the firm and the industry. The firm is itself an industry.
The firms can influence the price of a product and hence, these are price makers, not the price takers.
There are barriers for the new entrants.
The demand curve under monopoly market is downward sloping, which means the firm can earn more profits only by increasing the sales which are possible by decreasing the price of a product.
There are no close substitutes for a monopolist’s product.
Under a monopoly market, new firms cannot enter the market freely due to any of the reasons such as Government license and regulations, huge capital requirement, complex technology and economies of scale. These economic barriers restrict the entry of new firms.
Types of Monopoly
1. Perfect Monopoly
It is also called as absolute monopoly. In this case, there is only a single seller of product having no close substitute; not even remote one. There is absolutely zero level of competition. Such monopoly is practically very rare.
2. Imperfect Monopoly
It is also called as relative monopoly or simple or limited monopoly. It refers to a single seller market having no close substitute. It means in this market, a product may have a remote substitute. So, there is fear of competition to some extent e.g. Mobile (Cellphone) telcom industry (e.g. vodaphone) is having competition from fixed landline phone service industry (e.g. BSNL).
3. Private Monopoly
When production is owned, controlled and managed by the individual, or private body or private organization, it is called private monopoly. e.g. Tata, Reliance, Bajaj, etc. groups in India. Such type of monopoly is profit oriented.
4. Public Monopoly
When production is owned, controlled and managed by government, it is called public monopoly. It is welfare and service oriented. So, it is also called as 'Welfare Monopoly' e.g. Railways, Defence, etc.
5. Simple Monopoly
Simple monopoly firm charges a uniform price or single price to all the customers. He operates in a single market.
6. Discriminating Monopoly
Such a monopoly firm charges different price to different customers for the same product. It prevails in more than one market.
7. Legal Monopoly
When monopoly exists on account of trade marks, patents, copy rights, statutory regulation of government etc., it is called legal monopoly. Music industry is an example of legal monopoly.
8. Natural Monopoly
It emerges as a result of natural advantages like good location, abundant mineral resources, etc. e.g. Gulf countries are having monopoly in crude oil exploration activities because of plenty of natural oil resources.
9. Technological Monopoly
It emerges as a result of economies of large scale production, use of capital goods, new production methods, etc. E.g. engineering goods industry, automobile industry, software industry, etc.
10. Joint Monopoly
A number of business firms acquire monopoly position through amalgamation, cartels, syndicates, etc, it becomes joint monopoly. e.g. Actually, pizza making firm and burger making firm are competitors of each other in fast food industry. But when they combine their business, that leads to reduction in competition. So they can enjoy monopoly power in market.
This question is part of UPSC exam. View all B Com courses
Most Upvoted Answer
Explain the monopoly? Write down features and types of monopoly?
The word monopoly means single while poly means selling. thus monopoly emplies single seller of a product in the market
Community Answer
Explain the monopoly? Write down features and types of monopoly?
Monopoly:
A monopoly is a market structure where a single seller controls the entire supply of a particular product or service. This allows the monopolist to dictate the price and quantity of goods or services sold in the market.
Features of Monopoly:
- Single Seller: In a monopoly, there is only one seller in the market.
- Unique Product: The monopolist sells a unique product with no close substitutes.
- Price Maker: The monopolist has the power to set prices based on demand.
- Barriers to Entry: Monopolies often have high barriers to entry, making it difficult for new firms to enter the market.
- Abnormal Profits: Monopolies can earn abnormal profits due to their control over the market.
Types of Monopoly:
1. Natural Monopoly: This type of monopoly occurs when one firm can meet the entire market demand at a lower cost than two or more firms.
2. Government Monopoly: A government monopoly is when the government owns and operates a particular industry or service.
3. Geographic Monopoly: Geographic monopolies occur when a single company dominates a specific region or area.
4. Technological Monopoly: Technological monopolies arise when a company holds exclusive rights to a particular technology or innovation.
In conclusion, a monopoly is a market structure with a single seller controlling the supply of a unique product, setting prices and quantities, and earning abnormal profits. Various types of monopolies exist, each with its own characteristics and implications for the market and consumers.
A monopoly is a market structure where a single seller controls the entire supply of a particular product or service. This allows the monopolist to dictate the price and quantity of goods or services sold in the market.
Features of Monopoly:
- Single Seller: In a monopoly, there is only one seller in the market.
- Unique Product: The monopolist sells a unique product with no close substitutes.
- Price Maker: The monopolist has the power to set prices based on demand.
- Barriers to Entry: Monopolies often have high barriers to entry, making it difficult for new firms to enter the market.
- Abnormal Profits: Monopolies can earn abnormal profits due to their control over the market.
Types of Monopoly:
1. Natural Monopoly: This type of monopoly occurs when one firm can meet the entire market demand at a lower cost than two or more firms.
2. Government Monopoly: A government monopoly is when the government owns and operates a particular industry or service.
3. Geographic Monopoly: Geographic monopolies occur when a single company dominates a specific region or area.
4. Technological Monopoly: Technological monopolies arise when a company holds exclusive rights to a particular technology or innovation.
In conclusion, a monopoly is a market structure with a single seller controlling the supply of a unique product, setting prices and quantities, and earning abnormal profits. Various types of monopolies exist, each with its own characteristics and implications for the market and consumers.
|
|
Explore Courses for B Com exam
|
|
Similar B Com Doubts
Explain the monopoly? Write down features and types of monopoly?
Question Description
Explain the monopoly? Write down features and types of monopoly? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Explain the monopoly? Write down features and types of monopoly? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Explain the monopoly? Write down features and types of monopoly?.
Explain the monopoly? Write down features and types of monopoly? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Explain the monopoly? Write down features and types of monopoly? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Explain the monopoly? Write down features and types of monopoly?.
Solutions for Explain the monopoly? Write down features and types of monopoly? in English & in Hindi are available as part of our courses for B Com.
Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free.
Here you can find the meaning of Explain the monopoly? Write down features and types of monopoly? defined & explained in the simplest way possible. Besides giving the explanation of
Explain the monopoly? Write down features and types of monopoly?, a detailed solution for Explain the monopoly? Write down features and types of monopoly? has been provided alongside types of Explain the monopoly? Write down features and types of monopoly? theory, EduRev gives you an
ample number of questions to practice Explain the monopoly? Write down features and types of monopoly? tests, examples and also practice B Com tests.
|
|
Explore Courses for B Com exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup