A monopolistic market is a market structure with the characteristics of a pure monopoly. A monopoly exists when one supplier provides a particular good or service to many consumers. In a monopolistic market, the monopoly (or dominant company) exerts control over the market, enabling it to set the price and supply.
Solution : A monopoly structure may arise in any of the following ways :
1. Covernment Licensing/Government Control. The government may grant license for production of particular commodity only to one producer leadig to monopoly. Licensing is used to ensure minimum standards of competency.
Thus a monopoly market is the one where a firm is the sole seller of a product without any close substitutes. In a monopoly market structure, a single firm or a group of firms can combine to gain control over the supply of any product.
Answer: A monopoly is defined as a market structure in which there is only one seller or firm. This single firm caters to the needs of a large number of buyers. Because it is the only firm in the market, it is regarded as the industry.
The U.S. markets that operate as monopolies or near-monopolies in the U.S. include providers of water, natural gas, telecommunications, and electricity.
Monopolistic competition characterizes an industry in which many firms offer products or services that are similar (but not perfect) substitutes. Barriers to entry and exit in a monopolistic competitive industry are low, and the decisions of any one firm do not directly affect those of its competitors.
A marketplace in which there is a lone vendor or seller is known as a monopoly. However, there are certain conditions to be fulfilled for it. A monopolistic competition market structure requires a lone manufacturer of a particular good.
Monopoly is a kind of market form which consists of only one seller or firm in the market. This single firm caters to the needs of a large number of buyers and produce a single type of good with no close substitutes of that good in the market.
Monopoly Example #1 – Railways The government provides public services like the railways. Hence, they are a monopolist because new partners or privately held companies are not allowed to run railways.
Public monopoly - It is a government-created monopoly; it is created when an entity is solely owned by the government. iii. Private monopoly - It occurs when a private firm sells a particular product in the entire market.
While monopolies created by government or government policies are often designed to protect consumers and innovative companies, monopolies created by private enterprises are designed to eliminate the competition and maximize profits.
A monopoly market is a situation when a service or a product may be brought only from a single supplier. This situation is the defining characteristic of a specific market. A monopoly situation usually arises in cases when there is an absence of economic competition.