, Pure Monopoly
exists "When ;
firm is the sole producer of product
single
>
-
a a
>
-
there are no close substitutes
Characteristics of Pure Monopoly : (Shan needs peanut butter now !!)
·
a
single firm is the sole producer of a specific good/ service
Single seller * Firm and industry = synonymous
2 No Close substitutes D .
A pure monopoly's product is unique
consumer cannot buy it any where else
3 Price maker
p . .
The firm controls total quantity supplied >
-
... controls the price
firm quantity supplied
can
change product price by
changing
4 Blocked entry ↑ There are economic/legal/technical barriers to enter
:
entry =
totally blocked
.. Pure monopoly has no competitors
Pure monopoly produce
Non-price Competition
can a
s
D
standardized or differentiated product
Regulated
Monopolies :
govt regulated
.
public facilities CEshom
* Monopolies can be
& Near monopolies : firm has the bulk of sales in a
specific industry (De Beers Diamond)
Monopoly Demand
* 3 AssumptionsR
1) Patents economies of scale and resource
ownership the
, secure monopolist's status
2) No gout. regulation
price for all units
3) firm is
single-price monopolist - charges same
of output
Demand curve
for Pure monopoly! Because the firm-industry to
pure monopolist demand curve is the same as the
market demand curve
exists "When ;
firm is the sole producer of product
single
>
-
a a
>
-
there are no close substitutes
Characteristics of Pure Monopoly : (Shan needs peanut butter now !!)
·
a
single firm is the sole producer of a specific good/ service
Single seller * Firm and industry = synonymous
2 No Close substitutes D .
A pure monopoly's product is unique
consumer cannot buy it any where else
3 Price maker
p . .
The firm controls total quantity supplied >
-
... controls the price
firm quantity supplied
can
change product price by
changing
4 Blocked entry ↑ There are economic/legal/technical barriers to enter
:
entry =
totally blocked
.. Pure monopoly has no competitors
Pure monopoly produce
Non-price Competition
can a
s
D
standardized or differentiated product
Regulated
Monopolies :
govt regulated
.
public facilities CEshom
* Monopolies can be
& Near monopolies : firm has the bulk of sales in a
specific industry (De Beers Diamond)
Monopoly Demand
* 3 AssumptionsR
1) Patents economies of scale and resource
ownership the
, secure monopolist's status
2) No gout. regulation
price for all units
3) firm is
single-price monopolist - charges same
of output
Demand curve
for Pure monopoly! Because the firm-industry to
pure monopolist demand curve is the same as the
market demand curve
