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Monopoly
Pure monopoly is the form of market organization in which
there is a single seller of a commodity for which there are
no close substitutes. Thus, it is at the opposite extreme
from perfect competition. Monopoly may be the result of:
(1) increasing returns to scale;
(2) control over the supply of raw materials;
(3) patents; or
(4) government franchise.
These natural monopolies usually operate under a
government franchise and are subject to government
regulation.
Under pure monopoly, the firm is the industry and faces the
negatively sloped industry demand curve for the
commodity. As a result, if the monopolist wants to sell
more of the commodity, it must lower its price.
Profit Maximization
Price Discrimination
Unemployment, Inflation,
and National Income
Aggregate Demand,
Aggregate Supply, and
Equilibrium Output