MONOPOLY
This is type of market where only one seller and many buyer. In this market seller have a power to increase the price of goods. And consumer have no option to shift on other sellers.In this market entry barriers are so high.In this market firm can earn high profit.From customer point of view this market is not beneficial for them.In this market the demand curve is downward sloping and more inelastic than oligopoly.In this market the firm has control over the prices. Nature of this product in this market is very unique.Barriers to entry,in turn, have three main sources.
1)monopoly resources
2)Government regulations
3)production process
Monopolist's profit-maximizing quantity of output is determined by intersection of marginal revenue curve and the marginal cost curve.
some examples of monopoly are local water companies and Indian railways. Indian railways is only services provider in that field so we can say that this is monopoly of railways because no one can enter in that market and this also indicates the uniqueness of the products.
The inefficiency of monopoly because it charges a price more than marginal cost, not all consumers who value the good at more than its cost buy it. Thus the quantity produced and sold by a monopoly is below the socially efficient level.
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