CSSET Notes - Monopoly Meaning and Features of Monopoly

Monopoly Meaning and Features of Monopoly 

Monopoly Meaning 

Monopoly is made up of two words: mono, which means one, and polein, which means to sell. In economics, a monopoly is a company that sells a product that has no competitors in the market. As a result, it is a single-firm business.

Google is one of the most well-known examples of a monopoly in today's world. Everyone knows about Google, whether it's your grandparents or a child in your house. Google is the most popular web search engine, with a market share of more than 70%. You can search it up on Google if you want to be sure!

1. A single seller and several other buyers: A monopoly may have a single seller and several other buyers as its fundamental quality. Because a single firm makes up the entire or most of the industry in such a market, there is no or only a tiny difference between the industry and the seller. As a result, the firm's demand curve is identical to or almost identical to the industry's demand curve. Because there are multiple purchasers, a private buyer in a monopoly market cannot alter the price of a product because the seller's power over the market is too great.

2. There is no close substitute: In a monopoly, the monopolist's merchandise has no close equivalent. Only when the cross-elasticity of the monopolist's commodities is equal to zero can such a market exist. As a result, the monopolist can establish the value of his own choice and refuse to sell at a lower price than that requested.

3. High obstacles to entry for new enterprises: Because monopolist firms make above-average profits, new firms face numerous challenges when entering the field. There are a variety of reasons for this, including legal restrictions, technological advancements, or the presence of a material that others are unable to locate. In some cases, the monopolist operates in a small market, making it economically difficult for new businesses to enter.

4. Price Maker: When a monopoly exists, the monopolist has complete control over the commodity's availability. However, due to a large number of buyers, tiny buyer demand accounts for only a small portion of total demand. As a result, purchasers must pay the monopolist's set price for the goods.

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Oligopoly meaning

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