A Monopoly is One Supplier and Numerous Buyers

899 WordsFeb 17, 20184 Pages
Monopoly is where there is only one supplier and there are numerous buyers, where it means that monopoly firms are the only firm in the market, which it means that they control the whole market. In monopoly, as there are no other firms or competitors it means that there are no competition. An example of monopoly is PLN, where it is the only electricity business in Indonesia, where there are no other competitors with PLN. While perfect market is where there are both numerous of suppliers and buyers. Perfect competition is where there are a huge amount of competitors or there is a big competition in the market. There is no exactly a perfect competition yet, but an example of a business where almost reaches perfect competition is stock exchange. In perfect competition, all firms produce an identical or homogenous product where all of the firms are price takers. In a perfect competition, the firms have a perfectly elastic demand curve. Monopoly isn’t always bad for consumers as monopolies make a lot of profit, it could be used for research and development and for innovations. This monopoly firms may use price discrimination which benefits the economically weaker sections of the society. For example, Trans Jakarta provide cheaper cost where it would be beneficial for the consumer, the environment, as there are less private cars, and for the firm, as more affordable price would attract consumers which there would an increase of sales, to increase the market share. This monopoly
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