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MonoPly PPT

MonoPly PPT

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Published by VIKAS DOGRA

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Published by: VIKAS DOGRA on Nov 11, 2009
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11/06/2012

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 SUBMITTED TO: Dr. MANOJ VAIDAYA SUBMITTED BY:VIKAS DOGRA (H -2008-MBA-43)
 
Department of Business ManagementDr. Y. S. Parmar University of Horticulture &Forestry Nauni, Solan (H.P.) Pin- 173230
 
WHAT IS MONOPOLY?
 The term monopoly is derived from the Greek word monopolinwhich mean exclusive sale .Thus pure monopoly is a marketstructure in which a single firm is the sole of a product for whichthere are no close substitute’s .Since monopoly is the only sellerin the market; it has neither rivals nor direct competitors.
DEFINITIONS:
“Monopoly is a market situation in which there is a single seller,there are no close substitutes for commodity it produces, andthere are barriers to entry”. In the words of KOUTSOYIANNIS.And according to BAUMOL”A Pure monopoly is defined as the firmthat is also an industry. It is the only supplier of some particularcommodity for which no close substitutes.”
FEATURES OF MONOPOLY:
1 ONE SELLER AND LARGE NUMBER OF BUYERS
:Under this monopoly there should be a single producer of the commodity. Thus there is only one firm in monopolythere is no distension between firm and industry
2 MONOPLY IS ALSO AN INDUSTRY 
:UNDER MONOPLY SITUITION THRER IS only one firm and thedifference between firm and industry disappears3
RESTRICTIONS ON THE ENTRY OF THE NEW FIRMS
 
Barriers like patent rights, govt., laws, economy of scale etc. putrestriction on the entry of new firms
4. NO CLOSE SUBSTITUTES
Acc. To Boulding ” A PURE MONOPLY FIRM IS ONE THATPRODUCES SUCH A COMODITY AS HAS NO EFFECTIVESUBSTITUTE IN THE PRODUCTION OF OTHER FIRMS”
5. PRICE MAKER
A monopolist is a price maker; price of the commodity is fullyunder the control of the monopolist6.
PRICE DISCREMINATION
A monopolist may be able to charge diff. prices for the sameproduct from diff. customers. Thus monopolist can practice pricediscrimination
SOURCES OF MONOPOLY POWER
1.CONTROLE OVER RAW MATERIAL
A firm may control the total supply of a raw material. Hemay be the sole owner of a natural recourse.
2.PATENTS
A patent is an exclusive rights granted by the govt. to usesome productive technique or to produce a certain product.It is a sort of legal right to monopoly
3.GOVERNMENT POLICY 
 The govt. may grant a license to a firm to have the exclusiveprivilege to produce a given good or service in a particulararea.

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