ECN 101 Lecture Notes - Lecture 10: Natural Monopoly, The Seller, European Cooperation In Science And Technology
23 Apr 2023
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11. 1 characteristics of monopoly: a monopoly exists when a single firm is the sole producer of a product or service for which there are no close substitutes. Single seller a sole producer, no other seller has the same product. Blocked entry strong barriers to entry block potential competition. Non-price competition mostly pr or advertising, but can engage in advertising to increase demand: examples of monopoly. There are substitutes for the above, but either more costly or less appealing (where to put this?) In a monopoly there are strong barriers to entry effectively block all potential competition: the factors that keep firms from entering an industry: Economies of scale: lower per unit costs keep competitors out. Legal barriers: patents and licenses: patent laws protect inventor; promote r&d of licences-taxi ownership. Ownership of essential resources i. e. , vale-inco one time owned 90% of world"s nickel supply. Pricing and other strategic barriers: designed to make it difficult to enter the industry.
