The downward-sloping demand curve expresses that the price goes on falling as sales are increased. A monopolist can sell more of his output only at a lower price and can produce the sale at a higher price. The entire demand of the consumers for a product goes to the monopolist.

Nature of Demand Curve: In the case of monopoly, one firm constitutes the whole industry.

As there is no individual, rival producers can enter the market of the same product.

Strong Barriers to the Entry into the Industry Exist: In a monopoly market, there is a strong barrier to the entry of new firms.

A firm is said to be monopolist only when it is the single producer and supplying the product. A monopoly cannot exist where there is competition. As the commodity in question has no close substitute, the monopolist s at liberty to change the price according to his own choice.

No Close Substitute: Under monopoly, a single producer produces single commodities that have no close substitute.

The characteristics feature of a single seller dominates the distinction between the firm and the industry. A monopoly firm may be owned by a person, a few members, or a joint-stock company.

One Seller and a Large Number of Buyers: a Monopoly is a form of imperfect market structure where there is only one seller of a product.

If he charges a high price, the demand for a product will be less, and if he charges a low cost, the demand will increase. However, a monopolist can undoubtedly fix the rate at which he sells his product, but the amount of product cannot be determined that the purchaser will buy. Monopolistic can sell his commodity at any price he likes. The case elastically of demand with every product is shallow.

SPECIOUS ARGUMENTS FOR TOLERATING MONOPOLIES:Ī monopoly is a market situation where there is only one seller of a product with barriers to entry and exit of others.Perfect Competition Monopolistic Competition – Oligopoly Monopoly:.

Monopoly economics contitions