What is Monopoly?

• A monopoly is a market containing a single firm that has

or is close to total control of the sector.
• There is no other firm or company in monopoly.
• There is no competition due to absence of other
companies or firm
 Characteristics
• Profit Maximizer: Maximizes profits.
• Price Maker: Decides the price of the good or product to
be sold, but does so by determining the quantity in order
to demand the price desired by the firm.
• High Barriers: Other sellers are unable to enter the
market of the monopoly.
 Characteristics
• Single seller: In a monopoly, there is one seller of the
good, who produces all the output. Therefore, the whole
market is being served by a single company, and for
practical purposes, the company is the same as the
industry.
• Price Discrimination: A monopolist can change the price
or quantity of the product. He or she sells higher
quantities at a lower price in a very elastic market, and
sells lower quantities at a higher price in a less elastic
market.
 Strength of Monopoly
• The first and foremost advantage of monopoly is that since there is
one single seller in the market it leads to economics of scale because
all supply is concentrated at one place and that leads to big scale
production which in turn leads to lower cost per unit for the seller and
if the seller passes it to the consumer that consumer will also benefit
from the lower price of product being available for consumption.
• Another advantage of monopoly is that since there is no competition
sellers do not resort to unfair promotional tactics like their product is
better than others or claiming incorrect features in their product or
giving discounts after increasing the price of product and so on.
 Strength of Monopoly
• Since there are abnormal profits in case of monopoly
seller can invest that amount in research and development
of product so that customers can get better a quality
product at reduced price leading to enhanced consumer
surplus and satisfaction.
• Control of natural resources: A prime source of monopoly
power is the control of resources (such as raw materials)
that are critical to the production of a final good.
SWOT ANALYSIS

Strength of Monopoly
Biren Pachal
2016022
2nd Semester
 Conclusion
In monopoly a firm or company is a sole producer and since
there is absent of competition in it, a firm will try to allocate
its resources towards the betterment of the product. Since
there is no competition the allotment of natural resources is
with one firm, the firm will use these resources only
according to their need and not exploit just because of the
competition.