ECON 1001 Lecture Notes - Lecture 15: Imperfect Competition, Product Differentiation, Monopolistic Competition
Document Summary
It is a market situation where there is only one producer of a commodity with no close substitutes. Railways, post and telegraph electricity and water supply undertakings are examples of monopoly. A single seller: the first main feature of the monopoly is that there is only one seller of a commodity in the market with the reason that there is no distinction between industry and firm. The monopolist may be an individual a firm, or group of firms or a government corporation or even government itself. Against a single seller, there can be any number of buyers for the commodity under monopoly. No close substitutes of the product: the second feature of monopoly is that the product sold by the monopolist has no close substitutes. The goods sold by the monopolist do not face any competition. Though substitutes of the product are available, yet they are not close substitutes.
