What do you mean by Monopoly, Pure Monopoly and Bilateral Monopoly ??
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Answer:
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Explanation:
Monopoly:-
Monopoly is a market situation in which there is only one seller of a product. The product has no close substitutes. The cross elasticity of demand with every other product is very low. The monopolized product must be quite distinct from the other products so that neither price nor output of any other seller can perceptibly affect its price-output policy. ‘Inter alia’ it implies that the monopolist cannot influence the price-output policies of other firms. Thus he faces the industry demand curve, his firm being an industry itself.
The demand curve for his product is, therefore, relatively stable and slopes downward to the right, given the tastes and incomes of his customers. He is a price-maker who can set the price to his maximum advantage. However, it does not mean that he can set both price and output. He can do either of the two things.
His price is determined by his demand curve, once he selects his output level. Or, once he sets the price for his product, his output is determined by what consumers will take at that price. In any situation, the ultimate aim of the monopolist is to have maximum profits.
The type of monopoly described above is simple or imperfect monopoly. There is also pure, perfect or absolute monopoly to which we refer now. But we shall be concerned mainly with detailed discussion of simple monopoly and discriminating monopoly.
Pure Monopoly:-
In pure monopoly one firm produces and sells a product which has no substitutes. The cross elasticity of demand with every other product is zero. In Triffins words, “Pure monopoly is that where the cross-elasticity of demand of the monopolist’s product is Zero.” The monopolist has absolutely no rivals. His price-output policy does not influence firms in other industries. Nor is he affected by others.
Pure monopoly “occurs when a producer is so producer is so powerful that he is always able to take the whole of all consumers’ incomes whatever the level of his output. This will happen when the average revenue curve for the monopolist’s firm has unitary elasticity (is a rectangular hyperbola) and is at such a level that all consumers spend all their income on the firm’s product whatever its price.
Since the elasticity of the firm’s average revenue curve is equal to one, total outlay on the firm’s product will be the same at every price. The pure monopolist takes all consumers’ incomes all the time.”
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a pure monopoly is a market structure where one company is single source for a product and there are no close substitutes for the product available .pure monopoly are relatively rare.