Monopoly: Difference between revisions

Line 25:

:This market structure includes many sellers who offer different products and have some level of market influence.

===~~Characteristics of a monopoly~~===

===Key characteristics===

*Single producer ~~or seller~~ 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 |title=~~Monopoly~~ |url=https://www.~~law~~.~~cornell.edu~~/~~wex~~/monopoly |website=~~law.cornell.edu~~}}</ref>

*;'''Single producer'''

*No close substitutes ~~or comparable product for consumers~~.

::The market consists of only one company supplying the entire market demand.<ref>{{Cite web |last= |first= |date= |title= |url=https://penpoin.com/monopoly/ |website= }}</ref><ref>{{Cite web |last= |first= |date= |title= |url=https://www.vedantu.com/commerce/monopoly-market |website= }}</ref>

*High barriers to entry prevent competitors from entering the market.

*;'''No close substitutes'''

*Price maker ability ~~allows~~ monopolist to set market prices.

::Consumers have no alternative products that can satisfy the same need.<ref>{{Cite web |last= |first= |date= |title= |url=https://economictimes.indiatimes.com/definition/monopoly?from=mdr |website= }}</ref>

*Downward-sloping demand curve, ~~monopolist~~ face the entire market demand curve.

*;'''High barriers to entry'''

::Significant obstacles prevent competitors from entering the market.

:*;'''Legal barriers'''

:::Patents, copyrights, government licenses.

:*;'''Control of essential resources:'''

:::Owning key manufacturing processes or mining operations

:*;'''Economies of scale:'''

:::Large fixed costs make single firm production most efficient.<ref>{{Cite web |last= |first= |date= |title= |url=https://open.oregonstate.education/intermediatemicroeconomics/chapter/module-15/ |website= }}</ref>

:*'''Network effects:'''

:::Value increases with more users.<ref>{{Cite web |last= |first= |date= |title= |url=https://www.law.cornell.edu/wex/monopoly |website= }}</ref>

:*'''Deliberate exclusionary practices:'''

:::Predatory pricing or exclusive contracts.<ref>{{Cite web |last= |first= |date= |title= |url=https://www.law.cornell.edu/wex/monopoly |website= }}</ref>

*;'''Price maker ability'''

::The monopolist can set prices rather than accept market prices.<ref>{{Cite web |last= |first= |date= |title= |url=https://kstatelibraries.pressbooks.pub/economicsoffoodandag/chapter/__unknown__-2/ |website= }}</ref>

*;'''Downward-sloping demand curve'''

::Unlike competitive firms, monopolists face the entire market demand curve.<ref>{{Cite web |last= |first= |date= |title= |url=https://kstatelibraries.pressbooks.pub/economicsoffoodandag/chapter/__unknown__-2/ |website= }}</ref>

*;'''Price discrimination strategies'''

:*;First-degree

:::Charging each customer their maximum willingness to pay.

:*;Second-degree

:::Pricing varies by quantity purchased.

:*;Third-degree

:::Segmenting markets based on characteristics like age, location, or time of purchase.

===Monopoly process===

@@ Line 25: / Line 25: @@
 :This market structure includes many sellers who offer different products and have some level of market influence.
-===Characteristics of a monopoly===
+===Key characteristics===
-*Single producer or seller 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 |title=Monopoly |url=https://www.law.cornell.edu/wex/monopoly |website=law.cornell.edu}}</ref>
+*;'''Single producer'''
-*No close substitutes or comparable product for consumers.
+::The market consists of only one company supplying the entire market demand.<ref>{{Cite web |last= |first= |date= |title= |url=https://penpoin.com/monopoly/ |website= }}</ref><ref>{{Cite web |last= |first= |date= |title= |url=https://www.vedantu.com/commerce/monopoly-market |website= }}</ref>
-*High barriers to entry prevent competitors from entering the market.
+*;'''No close substitutes'''
-*Price maker ability allows monopolist to set market prices.
+::Consumers have no alternative products that can satisfy the same need.<ref>{{Cite web |last= |first= |date= |title= |url=https://economictimes.indiatimes.com/definition/monopoly?from=mdr |website= }}</ref>
-*Downward-sloping demand curve, monopolist face the entire market demand curve.
+*;'''High barriers to entry'''
+::Significant obstacles prevent competitors from entering the market.
+:*;'''Legal barriers'''
+:::Patents, copyrights, government licenses.
+:*;'''Control of essential resources:'''
+:::Owning key manufacturing processes or mining operations
+:*;'''Economies of scale:'''
+:::Large fixed costs make single firm production most efficient.<ref>{{Cite web |last= |first= |date= |title= |url=https://open.oregonstate.education/intermediatemicroeconomics/chapter/module-15/ |website= }}</ref>
+:*'''Network effects:'''
+:::Value increases with more users.<ref>{{Cite web |last= |first= |date= |title= |url=https://www.law.cornell.edu/wex/monopoly |website= }}</ref>
+:*'''Deliberate exclusionary practices:'''
+:::Predatory pricing or exclusive contracts.<ref>{{Cite web |last= |first= |date= |title= |url=https://www.law.cornell.edu/wex/monopoly |website= }}</ref>
+*;'''Price maker ability'''
+::The monopolist can set prices rather than accept market prices.<ref>{{Cite web |last= |first= |date= |title= |url=https://kstatelibraries.pressbooks.pub/economicsoffoodandag/chapter/__unknown__-2/ |website= }}</ref>
+*;'''Downward-sloping demand curve'''
+::Unlike competitive firms, monopolists face the entire market demand curve.<ref>{{Cite web |last= |first= |date= |title= |url=https://kstatelibraries.pressbooks.pub/economicsoffoodandag/chapter/__unknown__-2/ |website= }}</ref>
+*;'''Price discrimination strategies'''
+:*;First-degree
+:::Charging each customer their maximum willingness to pay.
+:*;Second-degree
+:::Pricing varies by quantity purchased.
+:*;Third-degree
+:::Segmenting markets based on characteristics like age, location, or time of purchase.
 ===Monopoly process===