Definition of monopoly, Managerial Economics

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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.


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