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Business Jargons

A Business Encyclopedia

Monopoly Market

Definition: The Monopoly is a market structure characterized by a single seller, selling the unique product with the restriction for a new firm to enter the market. Simply, monopoly is a form of market where there is a single seller selling a particular commodity for which there are no close substitutes.

Features of Monopoly Market

 

monopoly Market

  1. Under monopoly, the firm has full control over the supply of a product. The elasticity of demand is zero for the products.
  2. There is a single seller or a producer of a particular product, and there is no difference between the firm and the industry. The firm is itself an industry.
  3. The firms can influence the price of a product and hence, these are price makers, not the price takers.
  4. There are barriers for the new entrants.
  5. The demand curve under monopoly market is downward sloping, which means the firm can earn more profits only by increasing the sales which are possible by decreasing the price of a product.
  6. There are no close substitutes for a monopolist’s product.

Under a monopoly market, new firms cannot enter the market freely due to any of the reasons such as Government license and regulations, huge capital requirement, complex technology and economies of scale. These economic barriers restrict the entry of new firms.

Related terms:

  1. Monopolistic Competition
  2. Oligopoly Market
  3. Types of Oligopoly Market
  4. Market Structure
  5. Perfect Competition

Reader Interactions

Comments

  1. Colliam CHITAYA says

    May 25, 2017 at 1:50 am

    Quite helpful notes indeed. Simple and straight forward. Keep it up. I have liked the page.

    Reply
  2. Egbekhadamen Luke says

    June 11, 2017 at 3:25 pm

    This is one of best place to go, in terms of business and managerial issues. You guys are the Best.

    Reply
  3. Richard Dagadu says

    November 9, 2017 at 4:50 pm

    Brief, concise and very educative.

    Reply
  4. chela says

    March 22, 2018 at 2:06 pm

    its very educative and understandable

    Reply
  5. Josephine Adhiambo says

    March 30, 2018 at 12:18 am

    I liked the notes short and clear

    Reply
  6. MADZVOVA says

    November 1, 2018 at 9:18 am

    Indeed helpful

    Reply
  7. Alphonce says

    November 26, 2018 at 5:43 pm

    Sincerely,Its simpler and understandable. Keep it up

    Reply
  8. saira tariq says

    November 29, 2018 at 11:45 pm

    indeed, its understandable and in simple wording ..thanks alot

    Reply
  9. Rajeev says

    January 15, 2019 at 11:08 am

    Does cement industry comes under monopoly market structure in the economy?

    Reply
    • Megha M says

      January 15, 2019 at 2:31 pm

      No

      Reply
  10. George Boakye says

    February 12, 2021 at 4:03 am

    It’s very clear to understand

    Reply
  11. SHYAKA ERIC says

    July 21, 2021 at 1:59 pm

    HOW STRUCTURE OF MARKET MAY INFLUENCE THE BUSINESS BUYING BEHAVIOR

    Reply

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