{"id":23552,"date":"2015-02-06T05:40:26","date_gmt":"2015-02-06T05:40:26","guid":{"rendered":"http:\/\/vskills.in\/certification\/blog\/?p=23552"},"modified":"2024-04-03T13:15:22","modified_gmt":"2024-04-03T07:45:22","slug":"concept-of-monopoly-part-1","status":"publish","type":"post","link":"https:\/\/www.vskills.in\/certification\/blog\/concept-of-monopoly-part-1\/","title":{"rendered":"Concept of Monopoly- Part 1"},"content":{"rendered":"<p style=\"text-align: center\"><a ref=\"magnificPopup\" href=\"http:\/\/vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/concept-of-monopoly-part-1.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-24121\" alt=\"concept-of-monopoly-part-1\" src=\"http:\/\/vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/concept-of-monopoly-part-1.jpg\" width=\"272\" height=\"199\" \/><\/a><\/p>\n<p>Mono literally means one and poly means seller. So monopoly means one seller.<\/p>\n<p>The literal definition of monopoly: it is a market situation where there is single firm selling the commodity and there is no close substitute of the commodity sold by the monopolist. A monopolist can be an individual, a firm, a group of firms or a government corporation. Indian railways is an example of monopoly.<\/p>\n<p><b><span style=\"text-decoration: underline\">SOME IMPORTANT FEATURES OF MONOPOLY:<\/span><\/b><\/p>\n<ul>\n<li><b><i>Single seller of the commodity<\/i><\/b>: \u00a0since there is single seller of the commodity, the seller has sole control over its supply. Naturally, a monopolist can charge any price he wants. He can also charge different prices from different people according to their willingness to pay.<\/li>\n<\/ul>\n<p>Therefore, a monopoly firm is a price maker and not a price taker.<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li><b><i>Absence of close substitute of the product<\/i><\/b>: due to the absence of a close substitute of the commodity, a monopolist does not face any competition. As a result, the consumer has to buy the good at a higher price or have to do without it.<\/li>\n<li><\/li>\n<li><b><i>Difficult entry of a new firm<\/i><\/b>: the situation of the market is controlled by a monopolist in such a way that the entry of a new firm, which is selling the same (homogeneous) product, becomes very difficult. The barrier created can be economic, institutional or artificial in nature.<\/li>\n<\/ul>\n<p>Hence, a firm practicing monopoly earns abnormal profits in long run.<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li><b><i>Negatively sloped demand curve<\/i><\/b>: a demand curve is curve which shows a relationship between price of a commodity and its quantity demanded. The law of demand states that the price of good is inversely related to its demand, keeping all other factors constant. The demand curve facing a monopolist is negatively sloped, which indicates that more quantity can only be sold by lowering the price.<\/li>\n<\/ul>\n<p>Therefore, the demand curve is said to be a constraint facing a monopoly firm.<\/p>\n<p><a href=\"http:\/\/www.vskills.in\/certification\/accounting-banking-and-finance\">Click here for government certification in Accounting, Banking &amp; Finance<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Mono literally means one and poly means seller. So monopoly means one seller. The literal definition of monopoly: it is a market situation where there is single firm selling the commodity and there is no close substitute of the commodity sold by the monopolist. A monopolist can be an individual, a firm, a group of&#8230;<\/p>\n","protected":false},"author":484,"featured_media":24121,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[1519],"tags":[1998],"class_list":["post-23552","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting-banking-and-finance","tag-monopoly"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Concept of Monopoly- Part 1 - Vskills Blog<\/title>\n<meta name=\"description\" content=\"What is Monopoly?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vskills.in\/certification\/blog\/concept-of-monopoly-part-1\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Concept of Monopoly- Part 1 - 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