Monopoly

whats monopoly?

situation where one business is the dominant seller in the market

whats pure monopoly

• basically when theres only one company that has control over the market cuz they sell the item w/o competitors, etc (like water and railways) NOT GOVT RELATED

what is legal monopoly?

• when one company also has control over the market (rail /water/postal) but is protected by law and is a provider of service. GOVT RELATED

what is local monopoly?

when one business dominates in a village

what are the features of monopoly?

• tree flow of info

• unique product

• price makers (forces prices to go up by restricting supply)

• barriers 2 entry

what are the barriers to entry?

• high startup cost

• legal: govt signs contract w/ business so its legal to remove rivals

• new tech: better products → better research

• budget: spending thousands on marketing etc

• patent: legal license 2 own all rights to a product

what are new entrants?

when a company sells stuff they never sold before

what is the adv and disadv of monopoly?

adv	disadv
natural monopoly → EOS and innovation	high price: monopolist gives out limited output 2 force up price
efficiency as they are the main supplier	restricted choice → one supplier = no options
	lack of innovation and inefficiency

what is the adv and disadv for consumers?

adv	disadv
low price, quality, more choice	less options, low quality and high price

what is the adv and disadv for the economy?

adv	disadv
growth, gdp rise, efficient, less waste of resource	high cost, less output, less improvement