Instead, there are imperfect monopolies all around the world. However, pure monopoly is a rare phenomenon. No matter how unfair the pure monopoly price is, the buyers will have to stick to that price. Therefore, the power centred around a pure monopoly is immense. This means that pure monopolies do not even have a remote substitute. This particular type of monopoly differs from all the other monopoly types because the substitutes available for the product in pure monopoly is zero. Different Types of Monopolies: Pure Monopoly Therefore, a discriminatory monopoly, as the name suggests, discriminate its buyers in different markets with different prices. Why a simple monopoly differs from a discriminating monopoly is that the discriminatory monopoly firm charges different prices for the same product to different buyers. In either way, a monopoly gets to maximize its profit. Monopoly can either choose to price differentiation and quantity differentiation. It bases its objective on profit maximization. Price differentiation is a special power that a monopoly enjoys. A simple monopoly operates in a single market with a single price, unlike a discriminating monopoly that operates in more than one market.Įxamples: water supply, railway services 2. Here, a simple monopoly firm charges a uniform price for its products when selling to all its buyers. This is one of the monopoly markets structures. Let’s explore these monopoly structures separately as follows.ĭifferent types of monopolies 1. Hence, a monopolist treats all consumers in an equal way and charges a uniform price for the product. Since there are many buyers and one seller, no one can influence the price.Unlike in competitive market where there is a separate industry and many firms, monopoly has only one firm which is the price-maker and not price taker.There is only one seller in this market and its products are homogeneous.This characteristic creates different monopoly structures like pure monopoly and imperfect monopoly. This product has no close substitutes either. In monopoly, both producer and Apart from that, monopoly producer does not real information to another party.Monopoly differs from these structures especially due to its outstanding and absolute market power.
Monopoly is one of the market structures among other markets like perfect competition, monopolistic competition and oligopoly.The general characteristics of all the monopoly types are as follows. Further, imperfect information is a prominent feature in this market. Hence, there are barriers for a new producer to enter the market. Therefore, both the industry and firm in this market is one. Do you want to know the different types of monopolies? There are seven types of monopoly market structures namely simple monopoly and discriminating monopoly, natural monopoly, legal monopoly, pure monopoly, imperfect monopoly, industrial monopolies or public monopolies.Ī monopoly is a market situation where there is only one seller of products.
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