Академический Документы
Профессиональный Документы
Культура Документы
Offers Fair Use Policy Help Cent re Not ificat ions Sign In
/ Essays / Economics
Disclaimer: This work has been submit t ed by a st udent . This is not an example of t he work produced by our Essay Writ ing Service. You can
view samples of our professional work here.
Any opinions, findings, conclusions or recommendat ions expressed in t his mat erial are t hose of t he aut hors and do not necessarily reflect t he
views of UK Essays.
A monopoly is a market in which a single sellar sells a product which has no subst it ut e.A monopoly (from t he greek word ” mono” meaning single and
“polo” meaning t o sell). A monopoliest is a firm t hat is t he only sellers of product ( good or services) t hat has no close subst it ut e. Toot hpast e coal
and salt is under of monopoly . best example of reilways. There is t wo t ypes of monopoly.
1 PURE MONOPOLY- is t hat market sit uat ion in which t hereis absolut ely no subst it ut e of t he product and t he ent ire market is under cont rol of a
single firm.
2 MONOPOLY EXISTS- when t here is no close subst it ut e t o t he product and also when t here is a single producer and seller of t he product .
Single seller- t he ent ire market cont rol of a single firm. Product ion , dist ribut ion and selling of t he product are all cont rolled by t he same firm. There
is no compet it ion.eg t elephone, elect ricit y, post and t elegraph oil and gas were all government monopolies.
Single product - a single seller sells a product which has no subst it ut e or at least no close subst it ut e in t he market .
No difference b/w firm and indust ry-very dist inct feat ure of monopoly is t hat t he firm and t he indust ry are and t he same.
Independent decision making – ent ire market is undercont rol of a single firm can t ake decision about t he price and out put of it s product s whit hout
any worry about decision of rival of firms.
Rest rict ed ent ry- a monopoly is charat erised by rest rict ed ent ry of firm.
In most real market s wit h claims, falling demand associat ed wit h a price increase is due part ly t o losing cust omers t o ot her sellers and part ly t o
cust omers who are no longer willing or able t o buy t he product . In a pure monopoly market , only t he lat t er effect is at work, and so, part icularly for
inflexible commodit ies such as medical care, t he drop in unit s sold as prices rise may be much less dramat ic t han one might expect .
If a monopoly can only set one price it will set it where marginal cost (MC) equals marginal revenue (MR) as seen on t he diagram on t he right . This
can be seen on a big supply and demand diagram for many crit icism of monopoly. This will be at t he quant it y Qm; and at t he price Pm. This is above
t he compet it ive price of Pc and wit h a smaller quant it y t han t he compet it ive quant it y of Qc. The offensive monopoly gains is t he shaded in area
labeled profit (not e t hat t his diagram looks only at t he case where t here is no fixed cost . If t here were a fixed cost , t he average cost curve should
be used inst ead).
As long as t he price elast icit y of demand (in absolut e value) for most cust omers is less t han one, it is very advant ageous t o increase t he price: t he
seller get s more money for less goods. Wit h an increase of t he price, t he price elast icit y t ends t o rise, and in t he opt imum ment ioned above it will
be above one for most cust omers. A formula gives t he relat ion bet ween price, marginal cost of product ion and demand elast icit y which maximizes
a monopoly profit : (known as Lerner index). The monopolist ’s monopoly power is given by t he vert ical dist ance bet ween t he point where t he
marginal cost curve (MC) int ersect s wit h t he marginal revenue curve (MR) and t he demand curve. The longer t he vert ical dist ance, (t he more
inelast ic t he demand curve) t he bigger t he monopoly power, and t hus larger profit s.
The economy as a whole loses out when monopoly power is used in t his way, since t he ext ra profit earned by t he firm will be smaller t han t he loss
in consumer surplus. This difference is known as a deadweight loss.
Railways were first int roduced t o India in 1853. By 1947, t he year of India’s independence, t here were fort y-t wo rail syst ems. In 1951 t he syst ems
were nat ionalised as one unit , becoming one of t he largest net works in t he world. Indian Railways operat es bot h long dist ance and suburban rail
syst ems.
Background
The development of IR had it s root s in t he 1800s, when India was a Brit ish colony. The Brit ish East India Company and lat er, t he Brit ish colonial
government s were credit ed wit h st art ing a railway syst em in India.
The Brit ish found it difficult t o t raverse great dist ances bet ween different places in India. They felt t he need t o connect t hose places wit h t rains
t o speed up t he journey as well as t o make it more comfort able t han t ravel by road in t he great heat . They also sought a more efficient means t o
t ransfer raw mat erials like cot t on and wheat from t he hint erlands of t he count ry t o t he port s locat ed in Bombay, Madras and Calcut t a, from where
t hey would be t ransport ed t o fact ories in England. Besides, t he mid
/ Essays / Economics