Example of a monopoly
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The oligopoly exists in the market, where there are 2 to 10 sellers, selling identical, or slightly different products in the market. According to experts, oligopoly is defined as a situation when the firm sets its market policy, as per the anticipated behavior of its competitors. It is an economic situation where there is a small number of firms, selling competing products in the market. In simple terms oligopoly refers to ‘ competition among the few‘. This practice is followed to reap maximum revenue, to dispose of the excess stock or to capture foreign markets. if the quantity demanded is high then the low price is charged and vice versa. The prices also differentiate according to the quantity demanded by the buyer i.e. Under this market structure, price discrimination exists in a way that the price varies from customers to customers for the same product. In a monopoly market, there is no competition and so the monopolist overcharges the prices of products. There are no close substitutes of the commodity offered by the monopolist.Entry to such a market is restricted due to factors like license, ownership of resources, etc.There is only one seller in the whole market who produces or supplies a product.The salient features of monopoly are as under: Due to the dominance of the whole market, they enjoy the benefit of large scale production. The product or service offered by the seller is unique, which do not have any close substitute. In simple terms, Monopoly means ‘ sole to sell.’ It is a situation of the market where there exist only one seller in the market for a particular commodity or service, supplying goods to many customers and he is having ultimate control over it. Monopoly is a form of market structure, where only one seller sells his distinctive product and dominates the entire market.Ī market situation in which there are few firms in the market that sells either homogeneous or differentiated product and compete in the market.ĭue to economic, institutional, legal or any other reason. In the article presented to you, we are going to talk about the differences between monopoly and oligopoly, take a read. In an oligopoly, there are only few firms operating in the market and so, the sellers are influced by the acrivities of other sellers. On the other hand, oligopoly is a type of competition, whereby there are a few number of vendors in the market selling differential products or nearly differential products. Monopoly is a market condition whereby only one seller is selling an entirely heterogeneous product at the marketplace, having no close substitutes to the product offered by the seller.