Question

features of monopoly​

Answer 1

Features of Monopoly:

The various features of Monopoly are:

1. Single Seller:

Under monopoly, there is a single seller selling the product. As a result, the monopoly firm and industry is one and the same thing and monopolist has full control over the supply and price of the product. However, there are large numbers of buyers of monopoly product and no single buyer can influence the market price.

2. No Close Substitutes:

The product produced by a monopolist has no close substitutes. So, the monopoly firm has no fear of competition from new or existing products. For example, there is no close substitute of electricity services provided by NDPL. However, the product may have distant substitutes like inverter and generator.

3. Restrictions on Entry and Exit:

There exist strong barriers to entry of new firms and exit of existing firms. As a result, a monopoly firm can earn abnormal profits and losses in the long run. These barriers may be due to legal restrictions like licensing or patent rights or due to restrictions created by firms in the form of cartel.

4. Price Discrimination:

A monopolist may charge different prices for his product from different sets of consumers at the same time. It is known as ‘Price Discrimination’.

5. Price Maker:

In case of monopoly, firm and industry are one and the same thing. So, firm has complete control over the industry output. As a result, monopolist is a price-maker and fixes its own price. It can influence the market price by changing the supply of the product.

Answer 2

$\large\bold\orange{\underline{Answer :-}}$

A monopoly market is characterized by the profit maximizer, price maker, high barriers to entry, single seller, and price discrimination. Monopoly characteristics include profit maximizer, price maker, high barriers to entry, single seller, and price discrimination.