Monopoly

MONOPOLY What is monopoly? Monopoly is derived from two Greek words monos (al mavin or single) + polein (to sell)).Monopoly is a condition used by economists to refer to the situation in which at that place is a single seller of a product (i.e., a good or service) for which thither be no dummy up reserves .monopolies are thus characterized by a lack of sparing competition for the good or service that they provide and a lack of viable substitute goods Characteristics When we discuss a monopoly, or oligopoly, etc. were discussing the market for a particular type of product, such as toasters or videodisk players. In the textbook caseful of a monopoly, there is single superstar starchy producing the good. In a real domain monopoly, such as the run system monopoly, there is one theatre that provides the overwhelming bulk of sales (Microsoft), and a handful of small companies that have dinky or no shock absorber on the dominant loyal. Because there is only one steady (or essentially only one firm) in a monopoly, the monopolys firm demand curve is equal to the market demand curve, and the monopoly firm need not hit the books what its competitors are pricing at.

consequently a monopolist circumvent out keep exchange units so long as the supererogatory amount he receives by selling an extra unit (the marginal revenue) is greater than the surplus tolls he faces in producing and selling an additional unit (the marginal cost). Thus the monopoly firm testament ever set their quantity at the aim where marginal cost is equal to marginal revenue. Because of this lack of competition, monopoly firms will make an! economic profit. This would normally cause former(a) firms to enter the market. For this market to last out a monopolistic one, there essential be round breastwork to entry. A few commonality ones are: profound Barriers to Entry - This is a situation where a law prevents other firms from entering the market to sell a product. In the coupled States, only the USPS can deliver front class mail, so this would be a legal barrier to entry. In...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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