Monoploy

[ER2008]

Hi Acid
Can you explain for me what is monoploy? with an example to break it down simpler.
Thank you. This is question 8 in the question bank.

[hetal]

Hi, I would try here to explain you about the 3 main market structures.
1. Monopoly: it is a market structure where there is a single seller for a particular product or service. In other words the entity has a greater market share due to lack of competition or absence of the substitute goods. Its very difficult for the new firms to enter this market as the existing firm has significant control over the product.
Legal monopoly: a government firm which is the single firm entitled to provide a particular service in particular area is said to have legal monopoly. For example electricity

2. Oligopoly: there are few firms (a group of firms) having control over the market in relation to a particular product like monopoly. Which means there exists the competition but only among a selected group of companies.

3. Perfect competition: under perfect competition there are many number of buyers and sellers as well as substitutes of the product are easily available. As a result the level of competition is very high compared to oligopoly.

Hope you got the point.

[Acid]

Hiya,

Hetal has explained the monopoly well.. Consider a monopoly as a big , large and the only organization in an industry with more then 50% market share who is able to control and influences supplies and prices without the fear of competition because where monopoly exists there is hardly any place for competition. If you get 3 out of 4 slices of apple then the one slice you left is not competition !

Usually now days we see monopolistic organizations in telecom sector and pharmaceutical industries... Microsoft is also an example of a monopoly in few instances.

I hope this helps.

[ER2008]

Hi, I would try here to explain you about the 3 main market structures.
1. Monopoly: it is a market structure where there is a single seller for a particular product or service. In other words the entity has a greater market share due to lack of competition or absence of the substitute goods. Its very difficult for the new firms to enter this market as the existing firm has significant control over the product.
Legal monopoly: a government firm which is the single firm entitled to provide a particular service in particular area is said to have legal monopoly. For example electricity

2. Oligopoly: there are few firms (a group of firms) having control over the market in relation to a particular product like monopoly. Which means there exists the competition but only among a selected group of companies.

3. Perfect competition: under perfect competition there are many number of buyers and sellers as well as substitutes of the product are easily available. As a result the level of competition is very high compared to oligopoly.

Hope you got the point.

I got it for sure. Thanks again

[ER2008]

Thanks acid for those examples i think i see the picture better now.
Thanks again