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4) Entry barriers : The firm can easily
Find out :
Types of monopoly for the following exit from the industry whenever it wants.
products/services : But has to face certain entry barriers
1) Tea in Assam such as Government licence, patents etc.
2) Atomic energy 5) Lack of uniformity : There is a lack of
3) Logo of a commercial bank uniformity among the firms in terms of their
size. Some firms may be small while others
may be of bigger size.
Do you know? 6) Uncertainty : There is a considerable
Monopsony is the converse of monopoly. element of uncertainty in this type of market
It exists when there are many sellers but due to different behaviour patterns. Rivals
only one buyer. Buyer’s monopoly is rarely may join hands and co-operate or may try
found. A monopsonist can exploit the sellers to fight each other.
just as a monopolist may exploit the buyers.
In the labour market, a particular kind of III) Monopolistic competition :
labour is used by one employer only. Different brands of liquid cleaners :
II) Oligopoly :
The term oligopoly is derived from the
Greek words ‘Oligo’ which means few and
‘poly’ which means sellers. It is that market
where there are a few firms (sellers) in the
market producing either a homogeneous product
or a differentiated product. For example, mobile
service providers, cement companies etc. Fig. 5.3
Features of oligopoly :
Meaning and Definition : Monopolistic
1) Few firms or sellers : Under oligopoly competition is very realistic in nature. In this
market, there are few firms or sellers. These market there are some features of perfect
few firms dominate the market and enjoy competition and some features of monopoly
a considerable control over the price of a acting together. Prof. E. H. Chamberlin coined
product.
this concept in his book “Theory of Monopolistic
2) Interdependence : The seller has to be Competition” which was published in 1933.
cautious with respect to any action taken According to Chamberlin, “Monopolistic
by the competing firms. Since there are competition refers to competition among a large
few sellers in the market, if any firm makes number of sellers producing close but not perfect
the change in the price, all other firms in substitutes.”
the industry also try to follow the same to Following are the main features of
remain in the competition. monopolistic competition :
3) Advertising : Advertising is a powerful 1) Fairly large number of sellers : In
instrument in the hands of oligopolist. A monopolistic competition, the number of
firm under oligopoly can start an aggressive sellers is large but comparatively it is less
and attractive advertising campaign with than that of perfect competition. Due to this
the intention of capturing a large part of reason sellers’ behaviour is like monopoly.
market.
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