Monopoly Is A Market Structure

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Monopoly is a market structure where there is a single seller of a product that has no similar competitors. In a monopoly “the cost of single firm dominance have long been recognized. Some cost may include, but are not limited to, allocated inefficiency” (Gal, 2003, pg.58). In a monopoly the market is a structure in which there is only one producer and seller for a product. In other words, the single business is the industry. The entry into such a market is restricted due to high costs or other holds, which may be economic, social, or political. Economies of a scale are the major barriers in a monopoly. This can happen where the lowest unit cost and, also the low unit prices for consumers depend on the existence of a small number of large…show more content…
The marginal revenue curve is going to be below the demand curve. It is possible for a monopoly to be more efficient than many small firms. Economies of on a large measure such as natural monopoly may make monopoly the most efficient market model in some industries. Even so other inefficiency and rent-seeking cost such as politics and legal fees can entail substantial costs, causing inefficiency. Producer of surplus is significant due to lack of competition, which means the consumer surplus may be minimized. This market structure will not be a part of a fair income distribution of our society.
Oligopoly usually exists where few large firms producing a homogeneous or differentiated product dominate a market. A few examples are automobile and gasoline industries. To think of oligopoly “of circumstances in which this is not a sensible assumption. In particular, where a small number of large firms dominates a particular industry producing identical or closely substitutable products, one would expect the likely response of other firms to be a major factor influencing any price and output decision” (Maurya, 2008, pg.170). A few large firms would, each must consider its rivals’ reactions in response to its decisions about prices, output, and advertising. They would have to consider the standardized or differentiated products. Entry is usually hard
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