Question

Explain the implication of "Price Discrimination” feature of Monopoly. Also write the reasons for emergency of monopoly.

Answer 1

Explanation:

A monopoly firm is like an industry as the single seller constitutes the entire market for the product, which has no close substitutes. ... However, demand of the product is not in the control of monopoly firm. In order to increase the output to be sold, monopolist will have to reduce the price.

Answer 2

Price discrimination is one of the most important features of monopoly markets. It means selling goods at different prices.

Explanation:

1. Price discrimination refers to the process where the same item is sold at different prices to different customers as per the wishes of the seller.
2. When there is only a single producer of one good in the market, he has control over the prices of the goods.
3. Since there are no substitutes, the customers have no choice but to buy the products. This leads to the emergence of a monopoly market.
4. Price discrimination is harmful to equality and accounting purposes in the economy.