Monopolies Defined

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Brian Coil

Economic Definitions

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 A market can be defined as a group of firms willing and able to sell a similar product or service to the same potential buyers.  Imperfect competition covers all situations where there is neither pure competition nor pure monopoly.  Perfect competition and pure monopoly are very unlikely to be found in the real world.  In the real world, it is the imperfect competition lying between perfect competition and pure monopoly.  The fundamental distinguishing characteristic of imperfect competition is that average revenue curve slopes downwards throughout its length, but it slopes downwards at different rates in different categories of imperfect competition.  Monopoly refers to the market situation where there is a  Single seller selling a product which has no close substitutes.  Monopolies are characterized by a lack of economic competition to produce the good or service, a lack of viable substitute goods, and the existence of a high monopoly price well above the firm's marginal cost that leads to a high monopoly profit  The word “oligopoly” comes from the Greek “oligos” meaning "little or small” and “polein” meaning “to sell.” When “oligos” is used in the plural, it means “few” ,few firms or few sellers.  DEFINATION:  Oligopoly is that form of market where there are few firms and there is natural interdependence among the firms regarding price and output policy.

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Monopoly Competition Monopoly (from the greek “mónos”, single, and “polein”, to sell) is a form of the market structure of imperfect competition, mainly characterized by the existence of a sole seller and many buyers. This kind of market is normally associated with the entry and exit barriers. In economics, a monopoly refers to a firm which has a product without any substitute in the market. Therefore, for all practical purposes, it is a single-firm industry. A monopoly is a firm that supplies all of the output in a market.

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