Published by: sadikshya
Published date: 02 Jul 2021
The term monopoly was derived from Greek words, mono, and poly. Mono means single and poly means the seller. In the monopoly market, there is a single firm in the industry. Therefore the firm demand curves each and industry demand curve.
The monopoly firm is to decide its selling price. A monopoly firm is a price maker as well as a price taker. It posses the power to determine his product, the monopolist is a sole seller having a single product the buyers of the monopolist product are many. According to Koutsoyiannis “Monopoly is a market situation in which there is a single seller. There are no close substitutes for the commodity it produces. There are barriers to entry.
Features of the monopoly market as follow.
Single seller and a large number of buyers
Under monopoly, there should be a single producer of a commodity. It means there is only one firm under monopoly. Therefore no distinctions made between firm and industry. A monopoly firm is also an industry and the buyers of the product are in large number but no buyers can influence the price of the product.
Restriction on the entry of the new firm
There are some restrictions on the entry of new firms into the monopoly industry. For example single ownership of the raw materials, patent, right, government license, etc.
No close substitute
The commodity produces by a monopolist firm has no close substitute in the market.
Full control overprice
Science the monopoly firm alone produces the commodity in the market. The firm has full control over its price. The monopolist is a price maker he has fixed whatever price he wishes to fix his product.
Possibility of price discrimination
Many times a monopolist changes different prices form different consumers; it is called price discrimination in the market. The monopolist may charge different prices for the same product on the basis of region, age, time, etc.