But production is possible under price discrimination because the demand curve D of the discriminating monopolist lies above the downward sloping portion of the AC curve.
Monopoly is that it is always afraid that in case it does not keep pace with the wishes of the people, then it is just possible that some rival party may come in the market and successfully and easily capture that throwing them out of the market.
Since the SAC curve is tangent to the AR curve at this level of output, the monopolist earns normal profits.
The individual seller is able to divide and keep his market into separate parts only if it is imperfect. It implies that a monopolist can sell its product at different prices to different customers. For instance, if in a big city taxi operators combine to charge high rates, people may boycott taxi service and even start operating their own services by forming a cooperative society.
Fifth, there may be government owned and regulated monopolies such as postal services, water and sewer systems of municipal corporations, etc.
Thus he may charge different prices for substantially the same product. We now take the case where the government feels that monopoly price is very high and tries to bring it down by price regulation.
Third, a natural monopoly enjoyed by a firm when it supplies the entire market at a lower unit cost due to increasing economies of scale, just as in the supply of electricity, gas, etc.
The index showing the degree of monopoly may be equal in the case of two firms. But the manner and extent to which the monopolist will be able to influence price or output will depend upon the elasticity of demand for his product. On the other hand, if the scope is limited, then it can be seen that one day rival will come and may wipe out the existing monopolists, by providing a touch competition.
For instance, a rich man cannot become poor for the sake of getting cheap medical facilities.
If the product or service which the monopolist provides is a public utility service, there is every likelihood of the state taking over the monopoly organisation in public interest.
The monopoly also knows that for every commodity there is a substitute and as such will not like that the taste of the consumer should in any way change. Price discrimination also takes place when the seller of a commodity is a monopolist or when rivals enter into an agreement for the sale of the product at different prices to different customers.
If the prices are kept high the consumers can well organise themselves and the industry might alienate the sympathies of the society. It means that more of the product can be sold at a lower price than at a higher price.
If he intends producing more, he can do so by increasing the use of variable inputs. Most of them might have conflicting interests.Courses and Consequences of Monopoly. To start with, what is monopoly?
Monopoly is a state of market where there is only one supplier faces many buyers. The monopoly is characterized by the lack of competition and high barriers for potential companies to enter the market.
Essays Related to monopoly. 1. American Monopolies/5(9). In a monopoly, there is only one firm, the sole producer of a good, which has no close substitutes. A monopoly exists when there is only one firm in the industry.
The monopoly firm is a price maker, that means monopoly firm can choose what price to change. Nevertheless, it. Essay on Monopoly Market | Micro Economics. Article Shared by.
ADVERTISEMENTS: In this essay we will discuss about monopoly market. After reading this essay you will learn about: 1. Meaning of Monopoly 2. Essay on Monopoly Price Determination Essay on the Degree of Monopoly Power –.
We will write a custom essay sample on Economics and monopoly introduction specifically for you for only $ $/page. Essay Monopoly Monopoly in a Stratified Society Introduction to Sociology Fall Semester, Monopoly in a Stratified Society Introduction to Sociology – Fall In an interactive lesson designed to illustrate the effects of social privilege within a class system, four individuals played two minute games of the board game Monopoly.
Product enjoys monopoly in the market. Thus the above mentioned few reasons can become the cause of set up of an oligopoly market. Number of sellers and buyers in oligopoly: Now Oligopoly, as mentioned above can have from two to tens suppliers, rather than one in the case of monopoly market.Download