• A market structure characterized by a single seller, selling a unique product in the

market. In a monopoly market, the seller faces no competition, as he is the sole

seller of goods with no close substitute.
• Characteristics associated with a monopoly market make the single seller the
market controller as well as the price maker. He enjoys the power of setting the
price for his goods.
• Barriers to entry are the legal, technological, or market forces that discourage or
prevent potential competitors from entering a market. Barriers to entry can range from
the simple and easily surmountable, such as the cost of renting retail space, to the
extremely restrictive.
• There are two types of monopoly, based on the types of barriers to entry they exploit.
One is natural monopoly, where the barriers to entry are something other than legal
prohibition. The other is legal monopoly, where laws prohibit (or severely limit)
competition.
• Barriers to entry prevent or discourage competitors from entering the
market. These barriers include: economies of scale that lead to natural
monopoly; control of a physical resource; legal restrictions on
competition; patent, trademark and copyright protection; and practices to
intimidate the competition like predatory pricing.
• Monopolistic competition exists when many companies offer competing
products or services that are similar, but not perfect, substitutes. The barriers
to entry in a monopolistic competitive industry are low, and the decisions of
any one firm do not directly affect its competitors.
• Hair salons and clothing are examples of industries with monopolistic
competition.
• Oligopolistic Competition- A competitive situation in which there are only a
few sellers (of products that can be differentiated but not to any great
extent); each seller has a high percentage of the market and cannot afford to
ignore the actions of the others.
• Oligopoly is a form of imperfect competition and is usually described as
the competition among a few. Hence, Oligopoly exists when there are two
to ten sellers in a market selling homogeneous or differentiated products. A
good example of an Oligopoly is the cold drinks industry
• Antitrust Policy - It prohibits all agreements and conspiracies in restraint of
trade and commerce. These prohibited restraints include price fixing, market
allocation, boycotts, bid rigging and tying agreements.
• Antitrust laws were designed to protect and promote competition within all
sectors of the economy.