Question

Distinguish between simple monopoly and descriminating monopoly

Answer 1

Monopoly. ... In economics, amonopoly is a single producer of a product or service. In law, a monopolyis a firm that has a lot of market power and is able to charge very high prices for a product or service.


A discriminating monopoly is a single entity that charges different prices, which are not associated with the cost to provide the product or service, for its products or services for different consumers. ... By catering to each type of customer the monopoly makes more profit.

Answer 2

The following are the differences between the Simple Monopoly and the Discriminatory Monopoly:

1. "Simple Monopoly" is a situation where monopolist charges a single price to all the customers whereas in the "Discriminatory Monopoly" the monopolist charges different prices to a different group of customers.

2. Simple Monopoly faces a single demand curve for all customers whereas the demand curve is different in the Discriminatory Monopoly.

3. Simple Monopolist sells the same quantity with the same weight to all the customers but in Discriminatory Monopoly, the price and weight vary according to a group of customers.