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Following are the main features of 2) Public monopoly : When the production
monopoly market : is solely owned, controlled and operated
1) Single seller : In monopoly, there is no by the Government, it is known as public
competition as there is only one single monopoly. It is usually welfare oriented.
producer or seller of the product. But, the For example, Indian Railways.
number of buyers is large. 3) Legal monopoly : This monopoly emerges
2) No close substitute : There are no close on account of legal provisions like patents,
substitutes for the product of the monopolist. trade mark, copyrights etc. The law forbids
Therefore, the buyers have no choice. the potential competitors to imitate the
They have to either buy the product from design or form of the product registered
the monopolist or go without it. The cross under given branded names. For example,
elasticity of demand for his product is either Amul products.
zero or negative. 4) Natural monopoly : The monopoly created
3) Barriers to entry : Entry of the rivals is on the basis of natural conditions like
restricted due to legal, natural, technological climate, rainfall, specific location etc. is
barriers which do not allow the competitors known as natural monopoly. For example,
to enter the market. wheat from Punjab.
4) Complete control over the market supply: 5) Simple monopoly : In simple monopoly,
The monopolist has complete hold over the seller or a firm charges a uniform price for
market. He is the sole producer or seller of its product to all the buyers.
the product.
6) Discriminating monopoly : In
5) Price maker : A monopolist can fix the price discriminating monopoly, firm charges
of his own product as he controls the whole different prices to different buyers for the
market supply. Monopolist is a price maker. same product. For example, doctor charges
6) Price discrimination : Monopolist being a different fees to different patients.
price maker, he can charge different prices 7) Voluntary monopoly : To avoid cut
to different consumers for the same product, throat competition, some monopolists
on the basis of time, place etc. Thus, price voluntarily come together and form a
discrimination is an important feature of group of monopolists. This facilitates
monopoly market. For example, students them to maximise the profit. For example,
and senior citizens are provided railway Organisation of Petroleum Exporting
tickets at concessional rates.
Countries (OPEC).
7) No distinction between firm and industry:
A monopolist is the sole seller and producer You should know :
of the product. A monopoly firm itself is an Price descrimination under monopoly
industry.
Types of monopoly : Personal Place wise Time wise Use
Following are some of the types of Doctors Differences ST bus fare Electricity
monopoly : charge in house differs for charges are
1) Private monopoly : When an individual or different rent in rural over night different for
private body controls a monopoly firm it is fees to and urban and day domestic and
known as private monopoly. For example, different areas time travels commercial
uses
patients
Tata Group.
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