Monopoly †micro Economics Essay

Monopoly is a market structure in which at that place is a single seller, thither are no close substitutes for the commodity it produces and at that place are barriers to entry in same industry. Characteristics of Monopoly Single Seller on that point is only angiotensin-converting enzyme seller he can control any price or supply of his product. just now he cannot control choose for the product, as there are many buyers. No close Substitutes there are any close substitutes for the product. The buyers sire no alternatives or choice. both they prepare to buy the product or go without it.Price The monopolist has control oer the supply so as to increase the price. sometimes he may adopt price discrimination. He may mark different prices for different sets of consumers. A monopolist can either start out the price or quantity of output but he cannot do both, at the same time. No Entry there is any independence to different producers to enter the market as the monopolist is enjoying monopoly power. There are strong barriers for new firms to enter. There are legal, technological, economic and natural obstacles, which may block the entry of new producers.Firm and Industry Under monopoly, there is no difference mingled with a firm and an industry. As there is only wholeness firm, that single firm constitutes the whole industry. Causes for Monopoly Natural A monopoly may a insurrection on account of some natural causes. any(prenominal) minerals are available only in certain regions. For example, South Africa has the monopoly of diamonds plate in the world is mostly available in Canada and oil in Middle East. This is natural monopoly. Technical Monopoly power may be enjoyed due to technical reasons.A firm may receive control over raw materials, technical knowledge, special know-how, scientific secrets and formula that enable a monopolist to produce a commodity. e. g. , Coco Cola. Legal Monopoly power is achieved by means of patent rights, copyright and trade marks by the producers. This is c totallyed legal monopoly. biggish Amount of Capital The manufacture of some goods requires a large step of capital or lumpiness of capital. All firms cannot enter the field because they cannot afford to apparel such a large amount of capital. This may give rise to monopoly.For example, iron and steel industry, railways, etc. State Government will deport the sole right of producing and selling some goods. They are State monopolies. For example, we have public utilities like electricity and railways. These public utilities are undertaken by the State. Examples of Monopoly in Market In todays Market monopoly does not represent today there is cut throat competition in all the fields but still there are few industries which have monopoly those are mentioned below. Indian Railways Airlines in India till liberalization.OPEC ( A Group of inunct producing countries come together to form a organization and rule market) Microsoft (An tuition T echnology Firm) Monopoly can also exist within Pharmaceutical companies where when one gets patent rights they are the only fellowship producing the medicine and no one else can produce. Here above we saw example of Microsoft. Microsoft is a party that produces Operating System for computers which is the only graphical user interface between machine and human. There are other companies also like MAC. But as per patent they only work for Apple.Where as all other computer manufacturer are left with only option as Microsoft and its product. This is how Microsoft is under Monopolistic Condition and Market circumstances. And above mentioned all the distinctive can also be related to the example of monopoly. Today we have seen that Microsoft is a multi Billion Dollar Multinational company. This has grown over a period of time just because of its monopoly and very less competitors. This tells us the different ways by which a monopoly power of the company can grow. And company can make very good amount of profits.