Monopoly

✓monopoly is when one company and its

product dominate an entire industry whereby
there is little to no competition and consumers
must purchase that specific good or service
from the one company.
1. Assumption of monopoly model

A.single seller
✓the only Contractor of a particular product or
service reasonably available.
B. No close substitute
✓Usually, a monopolist sells a product which does not
have any close substitutes. Therefore, the cross elasticity
of demand for such a product is either zero or very small.
Also, the price elasticity of demand for the monopolist's
product is less than one.

C. Price taker
✓price-taker is an individual or company that must
accept prevailing prices in a market, lacking the market
share to influence market price on its own. Due to
market competition, most producers are also price-
takers.
D.Blocked entry
✓a barrier to entry is something that blocks or impedes
the ability of a company (competitor) to enter an industry.
A barrier to exit is something that blocks or impedes the
ability of a company (competitor) to leave an industry.

E. No price competition
✓ is a strategy that implies attracting customers and
increasing sales by providing superior product quality,
a unique selling proposition, a great location, and
excellent service rather than lower prices. It helps
brands stand out and win new consumers.
The supply curve of a monopoly cannot be drawn
because it is a price maker and not a price taker. There
is no unique relationship between the prices that the
monopoly firm charge and the quantity supplied at that
price.
A.The monopoly decides how much to produce using the
profit maximizingr rule;or where MC=MR

4. Monopolized market

✓markets where a certain product or service is offered

by only one company.

E. Economic profit
✓the difference between the
revenue received from sales
and the explicit costs of
producing its goods and
services, as well as any
opportunity costs.
C. Economic losses
✓is a term of art which refers to financial loss and
damage suffered by a person which is seen only on a
balance sheet and not as physical injury to person or
property
5. Economic effects of Monopoly
✓there is a shortage of means of payment in
enterprises, which leads to a rise in the cost of credit
and to an overall increase in costs. In a monopolized
market, this inevitably means reduced production and
higher prices.
 A. Interstate commerce
between two places in a State as part of trade, traffic,
or transportation originating or terminating outside the
State or the U.S.,
B. Criminal provisions
Those are criminal provisions relating to cases
where there is fraud or something as near fraud as
may be.
 1. Felony
They are generally defined as crimes punishable by
imprisonment of more than one year, and the prison
sentences are usually served in a federal or state
penitentiary rather than a county jail.
C. Civil provisions