'Monopoly – micro Economics Essay\r'

'Monopoly is a merchandise structure in which at that place is a unity seller, there atomic number 18 no close substitutes for the good it produces and there be barriers to entry in aforesaid(prenominal) industry. Characteristics of Monopoly •Single Seller: There is lonesome(prenominal) single seller; he can control e genuinely harm or supply of his product. But he cannot control demand for the product, as there atomic number 18 many buyers. •No close Substitutes: there are any close substitutes for the product. The buyers have no alternatives or choice. Either they have to buy the product or go without it.\r\n•Price: The monopolist has control all over the supply so as to increase the price. sometimes he may adopt price discrimination. He may fix different prices for different sets of consumers. A monopolist can either fix the price or quantity of output; but he cannot do both, at the same time. •No immersion: there is any freedom to other pro ducers to participate the market as the monopolist is enjoying monopoly power. There are strong barriers for clean soakeds to enter. There are legal, technological, economic and natural obstacles, which may block the entry of new producers.\r\n•Firm and Industry: Under monopoly, there is no difference between a firm and an industry. As there is only one firm, that single firm constitutes the whole industry. Causes for Monopoly •Natural: A monopoly may vacate on account of some natural causes. whatever minerals are available only in reliable regions. For ideal, South Africa has the monopoly of diamonds; nickel in the world is broadly available in Canada and oil in halfway East. This is natural monopoly. •Technical: Monopoly power may be enjoyed due to practiced reasons.\r\nA firm may have control over raw materials, technical knowledge, special know-how, scientific secrets and formula that enable a monopolist to produce a commodity. e. g. , Coco Cola. à ¢â‚¬Â¢ legal: Monopoly power is achieved through patent rights, copyright and traffic marks by the producers. This is called legal monopoly. •Large substance of Capital: The manufacture of some goods requires a long add up of capital or lumpiness of capital. All firms cannot enter the field because they cannot afford to invest such a large amount of capital. This may give deck up to monopoly.\r\nFor example, iron and steel industry, railways, etc. •State: presidency will have the sole right of producing and sell some goods. They are State monopolies. For example, we have humans utilities care electricity and railways. These public utilities are undertaken by the State. Examples of Monopoly in Market In today’s Market monopoly does not come through today there is cut throat competition in all the fields but still there are few industries which have monopoly those are mentioned below. •Indian Railways •Airlines in India till liberalization.\r\n •OPEC ( A Group of Oil producing countries trace together to form a organization and incur market) •Microsoft (An Information Technology Firm) •Monopoly can also exist within Pharmaceutical companies where when one gets patent rights they are the only accompany producing the medicine and no one else can produce. Here above we saw example of Microsoft. Microsoft is a company that produces Operating System for computers which is the only graphical user interface between political machine and human. There are other companies also like MAC. But as per patent they only process for Apple.\r\nWhere as all other computer manufacturing business are left with only option as Microsoft and its product. This is how Microsoft is under Monopolistic Condition and Market circumstances. And above mentioned all the characteristic can also be related to the example of monopoly. Today we have seen that Microsoft is a multi Billion Dollar Multinational company. This has grown over a period of time just because of its monopoly and very less competitors. This tells us the Different ways by which a monopoly power of the company can grow. And company can make very good amount of profits.\r\n'