3/27/2023 0 Comments Monopoly def![]() Therefore, under monopoly, firm’s demand curve constitutes the industry’s demand curve. In a monopoly situation, there is no difference between firm and industry. Under monopoly, it becomes essential to understand the nature of demand curve facing a monopolist. Nature of Demand and Revenue under Monopoly : Therefore, buyers have to pay the price fixed by the monopolist. But due to large number of buyers, demand of any one buyer constitutes an infinitely small part of the total demand. Under monopoly, monopolist has full control over the supply of the commodity. There are no close substitutes of the commodity it produces, there are barriers to entry”. “Monopoly is a market situation in which there is a single seller. ![]() “Pure monopoly is represented by a market situation in which there is a single seller of a product for which there are no substitutes this single seller is unaffected by and does not affect the prices and outputs of other products sold in the economy.” Bilas If there is to be monopoly, the cross elasticity of demand between the product of the monopolist and the product of any other seller must be very small. Thus, as a single seller, monopolist may be a king without a crown. Having control over the supply of the commodity he possesses the market power to set the price. ![]() Monopolist has full control over the supply of commodity. In other words, under monopoly there is no difference between firm and industry. ![]() The single producer may be in the form of individual owner or a single partnership or a joint stock company. There are no close substitutes for the commodity it produces and there are barriers to entry. ![]()
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