DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH

Name : A. Satyavani Kumari

Designation : Lecturer
Branch : DCCP
Institution : Govt. Poly. for Women, Suryapet
Branch : DCCP
Year/Semester : V Semester
Subject : Business Economics-I
Subject Code : CCP-502
Topic : Markets
Duration : 50 mts.
Sub Topic : Features of Monopoly, bases &
Barriers to monopoly.
Teaching Aids : PPT
CCP.502.57 1
Recap

In the last class we have discussed about

 What is a market?
 Classification of markets
 Features of perfect competition

CCP.502.57 2
Objectives

On completion of this period you would be

able to know
 Features of monopoly market
 Reasons for existence of monopoly market
 Barriers to entry into monopoly market

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Features of monopoly market
 Only one producer in the market
 Firm and industry are identical
 Complete negation of competition
 No close substitute for the product
 Buyers have no alternative or choice
 A monopolist is a price maker

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 Demand curve slopes downward
Means more can be sold at lower price
 No immediate rivals
 Complete control over the market price and supply

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Bases of Monopoly

 Natural Factors
Ex:- Skill
Good location
 Possession of Raw materials.
 Legal Rights
Ex:- Copy Rights etc.

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 Large scale economies
 Business Reputation
 Business combinations
Ex:- Holding companies
Trusts etc.

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Barriers to Entry into Monopoly

Absence of required positive elements become

barriers to entry in to monopoly.
 Lack of possession of natural factors
Ex:- Lack of skill
 No control over Raw-materials

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 Non-availability of economies

 No business reputation

 Business combinations not available

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Summary

In this class we have discussed about

 What is monopoly?
 Features of monopoly markets
 Bases for existence of monopoly
 Barriers to entry into monopoly market

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Quiz

1. How many producers will be in monopoly

market ?
 Only one
 In monopoly market who will set / fix the price ?
 The monopoly Producer / seller

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1. Under monopoly market there are number of
industries
• YES
• NO
2. Under monopoly market the firm and industry are
identical
a) YES
b) NO

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1. The monopolist has no absolute power of fixing
price
a) YES
b) NO
2. Under monopoly close substitutes will not be
available
a) YES
b) NO

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Examination Questions

1. What is monopoly market and Explain the

features of monopoly market situation
2. Explain the bases for existence of monopoly
market
3. Explain the barriers to enter into monopoly market

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