Suggest a new Definition Show Proposed definitions will be considered for inclusion in the Economictimes.com Economy
Definition: A market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute. Description: In a monopoly market, factors like government license, ownership of resources, copyright and patent and high starting cost make an entity a single seller of goods. All these factors restrict the entry of other sellers in the market. Monopolies also possess some information that is not known to other sellers. Characteristics associated with a monopoly market make the single seller the market controller as well as the price maker. He enjoys the power of setting the price for his goods. Know more about Monopoly. View this...
Related News
What occurs when there is only one seller of a product that has no close substitutes?Pure Monopoly
A monopoly exists when there's a single firm that controls the entire market. The firm and industry are synonymous. This firm is the sole producer of a product, and there are no close substitutes.
Are there close substitutes in monopolistic competition?Products in monopolistic competition are close substitutes; the products have distinct features, such as branding or quality. This is unlike both a monopolistic market, where there are no substitutes for products, and perfect competition, where the products are identical.
When a firm is is the sole seller of its product with no close substitute?A monopoly is a firm who is the sole seller of its product, and where there are no close substitutes. An unregulated monopoly has market power and can influence prices. Examples: Microsoft and Windows, DeBeers and diamonds, your local natural gas company.
Why monopoly has no close substitutes?No Close Substitutes
Also, the price elasticity of demand for the monopolist's product is less than one. Hence, in the monopoly market, the monopolist faces a downward sloping demand curve. Now, to a certain extent, all goods are substitutes for one another.
|