Monopoly: Difference between revisions
→Why it is a problem: Styling |
m →Key characteristics: styling |
||
| Line 26: | Line 26: | ||
===Key characteristics=== | ===Key characteristics=== | ||
'''Single producer''' | |||
::The market consists of only one company supplying the entire market demand.<ref>{{Cite web |last=Nasrudin |first=Ahmad |date=January 22, 2025 |title=Monopoly: Meaning, Examples, Characteristics, Causes, Advantages, Disadvantages |url=https://penpoin.com/monopoly/ |website=penpoin.com}}</ref><ref>{{Cite web |last=Tiwari |first=Dimple |date= |title=Monopoly Market: Features and Examples |url=https://www.vedantu.com/commerce/monopoly-market |website=vendantu.com}}</ref> | ::The market consists of only one company supplying the entire market demand.<ref>{{Cite web |last=Nasrudin |first=Ahmad |date=January 22, 2025 |title=Monopoly: Meaning, Examples, Characteristics, Causes, Advantages, Disadvantages |url=https://penpoin.com/monopoly/ |website=penpoin.com}}</ref><ref>{{Cite web |last=Tiwari |first=Dimple |date= |title=Monopoly Market: Features and Examples |url=https://www.vedantu.com/commerce/monopoly-market |website=vendantu.com}}</ref> | ||
'''No close substitutes''' | |||
::Consumers have no alternative products that can satisfy the same need.<ref>{{Cite web |date= |title=What is 'Monopoly' |url=https://economictimes.indiatimes.com/definition/monopoly?from=mdr |website=economictimes.indiatimes.com}}</ref> | ::Consumers have no alternative products that can satisfy the same need.<ref>{{Cite web |date= |title=What is 'Monopoly' |url=https://economictimes.indiatimes.com/definition/monopoly?from=mdr |website=economictimes.indiatimes.com}}</ref> | ||
'''High barriers to entry''' | |||
::Significant obstacles prevent competitors from entering the market. | ::Significant obstacles prevent competitors from entering the market. | ||
:*Legal barriers | ::*Legal barriers | ||
:::Patents, copyrights, government licenses. | ::::Patents, copyrights, government licenses. | ||
:*Control of essential resources | ::*Control of essential resources | ||
:::Owning key manufacturing processes or mining operations | ::::Owning key manufacturing processes or mining operations | ||
:*Economies of scale | ::*Economies of scale | ||
:::Large fixed costs make single firm production most efficient.<ref>{{Cite web |last=Emerson |first=Patrick |date= |title=Intermediate Microeconomics |url=https://open.oregonstate.education/intermediatemicroeconomics/chapter/module-15/ |website=oregonstate.education}}</ref> | ::::Large fixed costs make single firm production most efficient.<ref>{{Cite web |last=Emerson |first=Patrick |date= |title=Intermediate Microeconomics |url=https://open.oregonstate.education/intermediatemicroeconomics/chapter/module-15/ |website=oregonstate.education}}</ref> | ||
:*Network effects: | ::*Network effects: | ||
:::Value increases with more users.<ref>{{Cite web |date=July 2023 |title=Monopoly |url=https://www.law.cornell.edu/wex/monopoly |website=law.cornell.edu}}</ref> | ::::Value increases with more users.<ref>{{Cite web |date=July 2023 |title=Monopoly |url=https://www.law.cornell.edu/wex/monopoly |website=law.cornell.edu}}</ref> | ||
:*Deliberate exclusionary practices: | ::*Deliberate exclusionary practices: | ||
:::Predatory pricing or exclusive contracts. | ::::Predatory pricing or exclusive contracts. | ||
'''Price maker ability''' | |||
::The monopolist can set prices rather than accept market prices. | ::The monopolist can set prices rather than accept market prices. | ||
*Downward-sloping demand curve | *Downward-sloping demand curve | ||