Definition of monopoly, Managerial Economics

Assignment Help:

1. Prof. Thomas "Generally the term Monopoly is used to cover any effective price control, whether of demand or supply of services or goods; hardly it is used to mean a combination of merchants or manufacturers to control the supply price of services orcommodities".

2. Prof. Chamberlain "Monopoly refers to control over supply".

3. Prof. Robert Triffin 'Monopoly is a market situation in that a firm is independent of price changes in product of each and every other firm".

He is known as a monopolist. He is the only producer in the industry. There are no close substitutes for his product. So, when there is just one seller of a commodity and there isn't any competition at all, situation is one of pure monopoly.

A monopolist firm is itself an industry, for distinction between a firm and an industry disappears under monopoly.

In technical language, pure monopoly is a single firm-industry where cross-elasticity of demand between its product and products of the other industries is zero.

Professor E.H. Chamberlin points out that essence of monopoly is control over supply.

Pure monopoly barely exists in reality. It is just a theoretical concept, since even if there were no close substitutes, some kind of competition would always be there, such as a choice between decorating a house and buying a car. Though pure monopolies are a rare phenomenon in developed countries.


Related Discussions:- Definition of monopoly

Insurance Premiums, Green Shield Insurance gives NEMO Corporation with cove...

Green Shield Insurance gives NEMO Corporation with coverage for prescriptions, dental work, and extended health services. Every subscriber uses $435 worth of dental services per ye

Cost of production and efficiency in long-run equilibrium, What are the con...

What are the conclusions about the cost of production and efficiency in the long-run equilibrium of a perfectly competitive industry? Three conclusions regarding the cost of pr

Price elasticity of two parallel demand curves, It can be geometrically pro...

It can be geometrically proved that two elasticity are equal, which is., QB=RD Let's first consider ΔAOB. If we draw a horizontal line from point Q to intersect the vertical axis a

Institutional intervention theories, The institutional intervention theorie...

The institutional intervention theories Collective bargaining provides an example of what is sometimes called bi- lateral monopoly; the trade union being the monopolist suppli

Marginal utility, Marginal Utility The extra utility derived from the ...

Marginal Utility The extra utility derived from the consumption of one more unit of a good, the consumption of all other goods remaining unchanged. The hypothesis of dimin

What do you mean by cost function, Q. What do you mean by Cost Function? ...

Q. What do you mean by Cost Function? Cost function is a derived function. It's derived from the production function that describes the efficient method of production at any gi

Short-run equilibrium, SHORT-RUN EQUILIBRIUM All firms are assumed to ...

SHORT-RUN EQUILIBRIUM All firms are assumed to aim at maximizing profits or minimizing losses.  The monopolist controls his output or price, but not both. The monopoly maxi

When is production profitable according to price-taking firm, When is produ...

When is production profitable according to price-taking firm at profit, break-even or loss? Production profitable at profit, break-even or loss: a. When TR > TC, in that cas

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd