Monopoly (Business)

Yes, perfect competition allows the market to dictate prices where as a monopoly can set any price because there is no other alternative.

There are various reasons why monopoly leads to an inefficient outcome. Some of the reasons are as follows: * It produces less output that what a competitive market would and charge higher price which ultimately leads to a decline in consumer surplus and a deadweight loss. * Monopoly charges a price above its marginal cost, i.e. P > MC, and this results in an allocative inefficiency * A monopoly doesn't produces at the lowest point of the average cost curve (AC) and hence it leads to production inefficiency. * Monopoly has less incentive to cut cost as it doesn't face competition. This is often termed as X-inefficiency. * A monopoly makes supernormal profit (economic profit), i.e. Q * (AR - AC), leading to an unequal distribution of income. * Monopoly produces less than perfect competition and hence creates unemployment of resources. * By producing less in order to charge higher price, monopoly creates an artificial scarcity. The inefficiency associated with a creation of artificial scarcity is called the Deadweight Loss. (Written by Manish Regmi )

A natural monopoly exists when a single firm can supply a good or service to an entire market at a lower price than could two or more firms. Generally it arises when there are economies of scale over the relevant range of output.

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1. Perfect Monopoly: It is also called as absolute monopoly. In this case, there is only a single seller of product having no close substitute; not even remote one. There is absolutely zero level of competition. Such monopoly is practically very rare.
2. Imperfect Monopoly: It is also called as relative monopoly or simple or limited monopoly. It refers to a single seller market having no close substitute. It means in this market, a product may have a remote substitute. So, there is fear of competition to some extent e.g. Mobile (Cellphone) telcom industry (e.g. vodaphone) is having competition from fixed landline phone service industry (e.g. BSNL in India).
3. Private Monopoly: When production is owned, controlled and managed by the individual, or private body or private organization, it is called private monopoly. e.g. Tata, Reliance, Bajaj, etc. groups in India. Such type of monopoly is profit oriented.
4. Public Monopoly: When production is owned, controlled and managed by government, it is called public monopoly. It is welfare and service oriented. So, it is also called as 'Welfare Monopoly' e.g. Railways, Defence, etc.
5. Simple Monopoly: Simple monopoly firm charges a uniform price or single price to all the customers. He operates in a single market.
6. Discriminating Monopoly: Such a monopoly firm charges different price to different customers for the same product. It prevails in more than one market.
7. Legal Monopoly: When monopoly exists on account of trade marks, patents, copy rights, statutory regulation of government etc., it is called legal monopoly. Music industry is an example of legal monopoly.
8. Natural Monopoly: It emerges as a result of natural advantages like good location, abundant mineral resources, etc. e.g. Gulf countries are having monopoly in crude oil exploration activities because of plenty of natural oil resources.
9. Technological Monopoly: It emerges as a result of economies of large scale production, use of capital goods, new production methods, etc. E.g. engineering goods industry, automobile industry, software industry, etc.
10. Joint Monopoly: A number of business firms acquire monopoly position through amalgamation, cartels, syndicates, etc, it becomes joint monopoly. e.g. Actually, pizza making firm and burger making firm are competitors of each other in fast food industry. But when they combine their business, that leads to reduction in competition. So they can enjoy monopoly power in market.

The Spice Trade was a two-part endeavor. Arab merchants went to the Indian subcontinent or sailed to Indonesia to buy spices from local merchants and brought them to the Levantine ports like Jaffa, Tyre, Sidon, and Byblos. Or, they would be brought to the major Turkish cities like Istanbul and Bodrum. At all of these port cities, Venetian merchants would purchase the spices from the Arab merchants and redisperse them in Venice to various European States. As the Venetians were the most effective shipbuilders in the Mediterranean, they prevented the rise of any European attempting to cut into the trade. (Venice is now part of Italy, but it was independent until the 1800s.)

Without monopoly society would flatline, where economic growth would slow to a stop and socio-economics would die. This is because in order to have a positively functioning society one must promote growth. Competition must exist in society in order for growth to occur and be more effective. Monopoly is the process by which a firm competes in a market sector with other firms in a fight for control toward a puremonopoly.

Generally, a company that monopolizes an entire market, illegally. Oddly, some monopolies are completely legal. Working in concert with other companies to "gouge" the customer is called "price-fixing".

it made it so that everyone would have a equal change to get money.

the monopolist produces at a point where marginal revenue=marginal cost, he uses this quantity, and goes up vertically until the demand curve is met. This quantity is lower than a competitive equilibrium and thus, price is higher as well.

A monopoly is a market which has only one firm, the firm has market power, and there are barriers to entry. The long run profits for a monopolist may be greater than zero. Monopolistic competition is more closely related to perfect competition than monopoly. In monopolistic competition, there are many firms in the market. However, each firm has product differentiation. An example of monopolistic competition would be the jeans industry. There are many different types/quality of jeans e.g. True Religion, Levi's and Lee's. Products are somewhat differentiated, but, as in perfect competition, the long run profit = 0. Oligopoly is a market in which there are only a few firms, each firm has market power, and there is much product differentiation between the firms. The long-run profit of oligopoly can be greater than zero, because there are barriers to entry in the market.

The government can create a monopoly when, in doing so, it is in the interest of the public good.

A true monopolist will charge a VERY LOW price, so as to cause his competitors to go out of business. Then, when other companies have given up, he'll raise his prices.

But in a free economy, he can't raise prices TOO high, for fear of attracting new entrants to the market.

So a monopolist will invariably team up with market regulators to prevent new competition from arising. The Example of the Year of this phenomenon is the taxicab alliance supported by taxicab regulators, trying to prevent Uber and Lyft from stealing the taxi market with lower prices and better service,

Inelastic demand means a situation in which the demand for a product does not increase or decrease correspondingly with a fall or rise in its price. From the supplier's viewpoint, this is a highly desirable situation because price and total revenue are directly related; an increase in price increases total revenue despite a fall in the quantity demanded. An example of a product with inelastic demand is gasoline. Refer to link below.

Yes.

a monopoly if it has a high demand can push prices up simply people will pay for something that is in demand where as a monopoly with low demand will carry on selling the item for less but the way a monopoly works means that the person who is operating the monopoly will shift the supply lower to always push the price up.

Market power, i.e. the ability to impose a price higher that would exist in a perfectly competitive market. Moreover, monopolies tend to produce a lower level than the competitive enterprise.

A natural monopoly occurs in the fact that we need plants to produce oxygen. Plants are the only known species to produce oxygen and in turn, our by-product is carbon which the plants need. Therefore, the monopoly works both ways.

A perfect competitive market and pure monopoly market both have to follow the "law of demand".

NO, it depends on where the ATC (avg total cost) intercepts the MC (Marginal Cost)

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In 1904 President Roosevelt got the supreme court to rule that Northern securities company was a monopoly.

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Spanish Monopoly System is all goods produced in the New World had to be exported to Spain and to no other country but Spanish countries and only in Spanish ships. Everything the colonists bought had to be imported from Spain itself and carried in Spanish ships

well technically a monopoly is just holding 25% percent of the market, so it would help if the market was smaller.