Single Monopoly Market: Meaning
A marketplace in which there is a lone vendor or seller is known as a monopoly. However, there are certain conditions to be fulfilled for it. A monopolistic competition market structure requires a lone manufacturer of a particular good.
There cannot be an alternative for this good, and for this situation to continue over time, adequate constraints are maintained to stop any other enterprise from entering the marketplace and start selling the good.
To understand the difference in the equilibrium of a monopoly market in comparison to other market structures, we need to presume that all the other markets remain accurately competitive.
Following are the few points that a vendor of a monopoly market should have:
- All the customers are price takers.
- The marketplaces of the inputs used in the manufacturing of a good are perfectly competitive from the supply and demand perspective.
- If the given conditions are content, then we can define the situation as a monopoly in a single commodity market.
Also know: What is an Oligopoly?
Features of Monopoly Market
Maximise profit: It is an important reason why a company wants to be in a monopoly market. The company strives to generate and secure not only the revenue but also to maximise the profit.
Price maker: The monopoly players have the authority to fix and plan the price of goods. In this market, the firm has the sole right to influence the market rate and has the pricing power. Here, the price is modified according to the demand and supply of goods in the market.
High competition: A monopoly market has high barriers for new players or participants to enter. Sometimes, high competition makes it difficult for participants of the monopoly market to make less profits.
Explore link: Important Question for Non-Competitive Market
A commodity market can be defined as a virtual or a physical marketplace for purchasing, trading, and selling primary products or raw materials. Today, across the world, there are a total of about 50 vital controlling commodity markets. These markets supervise, control, and monitor the global rates of these commodities.
Types of Commodity Markets
Hard commodity: The commodities that are derived naturally are known as hard commodities. Examples: Oil, gold, coal, and more
Soft commodity: All animal livestock or agricultural products come under soft commodities. Examples: Sugar, soybean, maize, wheat, and more.
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