Question

Mention two features of monopoly.

Explain three main features of monopoly.

State two important characteristics of monopoly.

Explain the main characteristics of a monopoly.

State three main features of a monopoly market.

Explain one feature of a monopoly market.

Explain the important characteristics (features) of a monopoly market.

Discuss four main features of a monopoly market.

State any three main characteristics of monopoly.

Discuss two features of monopoly.

Answer 1

1. Single seller and large number of buyers: Under monopoly, there is only one seller or firm or manufacturer of a commodity. The product sold by the monopolist may or may not be homogeneous. The existence of a single seller of one product eliminates the difference between the firm and the industry. There can be any number of buyers under a monopoly.
2. No Close Substitutes: A second feature of monopoly is that there are no close substitutes available for the product sold by the monopolist. A pure monopoly exists only when there is no close substitute for the product sold by the monopolist. Indian railways is another example of a monopoly.
3. Restriction on the Entry of New Firms: Under monopoly, new firms cannot enter the industry. There are strong barriers that prevent new firms from entering the industry. These barriers may take several forms, such as patent rights government licences, economies of scale, etc. Thus, a monopolist faces no competition and earns abnormal profit in the long run.
4. Firm is a Price-Maker: Due to strong barriers to the entry of new firms into the industry, the monopoly firm has full control over the supply of its product. Therefore, it has full control over its price, too. It can influence the market price by varying its supply.
5. Price Discrimination: The act of selling the same product at different prices to different buyers is known as price discrimination. A monopolist can charge different prices to his different buyers easily. If a monopolist adopts a policy of price discrimination, the situation is called a discriminating monopoly.