A market place structure in which there is a lone vendor or seller is called monopoly. The conditions concealed in this lone line definition, however, has to be definitely affirmed. A monopoly market structure necessitates that there is a lone manufacturer of a particular good; no other good works as an alternative for this good; and for this situation to continue over time, adequate constraints are necessitated to be in place to stop any other enterprise from entering the market place and to start selling the good. In order to scrutinize the difference in the equilibrium outcoming from a monopoly in the good market place as compared to other market structures, we need to presume that all other markets remain accurately competitive. In particular, we require :
- All the customers are price takers
- That the market places of the inputs used in the manufacturing of this good are perfectly competitive both from the supply and demand perspective
- If the above conditions are contented, then we can define the situation as one of monopoly in a single commodity market
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