Economics

Economics

Market Structure

Market structure

The characteristics of the market, either organizational or competitive, that describes the nature of competition and the pricing policy followed in the market.

Multiple Choice

This market structure is characterized by a single seller in the market.

• Oligopoly

• Monopolistic Competition

• Perfect competition

• Monopoly

What is a monopoly?

A market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute.

Monopoly

* There is a single seller and single buyer in the market

* Huge market power

* Examples: Public utility companies

Open Ended

What would be a real world example of a monopoly?

Multiple Choice

When there is only one person or company that controls the entire market for a good or service that would be considered:

• A Monopoly

• An Oligopoly

• Monopolistic Competition

• Perfect Competition

Characteristics of a monopoly:

• One provider

• Many buyers 

• No competition

• Price maker

• High levels of barriers to entry and exit in the market. 

Open Ended

How many firms function in a monopoly market?

Advantages:

• Monopoly avoids duplication and hence avoids wastage of resources

• A monopoly enjoys economies of scale of product or services in the market

• Sources of revenue for the government as government gets revenue from of taxation

• Earning of huge profit led monopoly to invest in research and development and provide us new product

Disadvantages:

• Poor level of services

• Consumers may be charged high price for low quality of goods

• Lack of competition may lead to low quality and outdated goods and services

• Loss in research and development may force them to revert the profit from consumer

Open Ended

Do you think monopolies are important to society?

Evaluation

Worksheet

Evaluation

Worksheet