Show the characteristics of monopoly, Managerial Economics

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Q. Show the Characteristics of monopoly?

Let's summarise the main characteristics of monopoly as under:

  • Cross-elasticity of demand for a monopoly product is zero in the case of pure monopoly and very low in the case of simple monopoly.
  • There are no close substitutes for a monopoly product.
  • There is absence of competition.
  • There is a single producer of a commodity. The monopolistic firm has control over supply of its commodity.
  • There is no distinction between firm and industry under monopoly.
  • A monopolist will prevent entry of new firms in the long run.
  • Cases of pure monopolies are not found in developed countries. However, such cases of pure monopolies are found in developing countries.

 


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