Monopoly Flashcards
1
Q
Monopoly market structure characteristics:
A
- there is only one firm in the industry- the monopolist
- barriers to entry and exit prevent new firms entering market
- monopolist is a profit maximiser
- no substitutes for the good
- price is set above marginal cost and the firm earns a positive economic profit
2
Q
Industries with monopolies (UK)
A
- Gas
- Electric
- Telecommunications
- Rail transport
- Water supply
3
Q
Pure monopoly
A
There is only one firm however in many markets there are a no. of firms that have monopoly power
4
Q
Monopoly power
A
When a firm controls the price it charges for a product in a market
e.g. firms in monopolistic competitive or oligopolistic market
