CHAPTER 9
MARKET STRUCTURE:
MONOPOLY
,CHARACTERISTICS OF MONOPOLY
1. The Sole Seller
• The market has only single firm that sells/ provides the only product/
service to customers in a given market. This single firm is identical to an
industry.
2. Selling Unique Product/ Service
• The product or service provided by the monopoly firm has no close
substitute.
3. High Barriers to Enter the Market
• Some firms get their monopoly power because the law prevents others
from entering the market. There is also a government agency (rather th
private individual firms) that hold the firm legally to operates the econo
in specific industry or business, that makes the firm as a monopolist.
, 4. Firm is Price Maker
• The price of the product or service is set by the monopolist. Becau
there is no competition, the company may determine its own prici
The price is established by determining the quantity required to
demand the firm's targeted price (maximizes revenue).
MARKET STRUCTURE:
MONOPOLY
,CHARACTERISTICS OF MONOPOLY
1. The Sole Seller
• The market has only single firm that sells/ provides the only product/
service to customers in a given market. This single firm is identical to an
industry.
2. Selling Unique Product/ Service
• The product or service provided by the monopoly firm has no close
substitute.
3. High Barriers to Enter the Market
• Some firms get their monopoly power because the law prevents others
from entering the market. There is also a government agency (rather th
private individual firms) that hold the firm legally to operates the econo
in specific industry or business, that makes the firm as a monopolist.
, 4. Firm is Price Maker
• The price of the product or service is set by the monopolist. Becau
there is no competition, the company may determine its own prici
The price is established by determining the quantity required to
demand the firm's targeted price (maximizes revenue).
