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.
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.
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
The govt. may grant a license to a firm to have the exclusiveprivilege to produce a given good or service in a particulararea.