What is a monopoly easy definition?
A monopoly is a dominant position of an industry or a sector by one company, to the point of excluding all other viable competitors. Monopolies are often discouraged in free-market nations.
What is a conventional monopoly?
Monopoly is a situation where there is a single seller in the market. In conventional economic analysis, the monopoly case is taken as the polar opposite of perfect competition. Thus, the monopolist has significant power over the price it charges, i.e. is a price setter rather than a price taker.
What is a franchise monopoly?
A franchised monopoly refers to a company, or individual, that is sheltered from competition by virtue of an exclusive license or patent granted by the government.
What is the condition of equilibrium in monopoly?
The conditions for Equilibrium in Monopoly are the same as those under perfect competition. The marginal cost (MC) is equal to the marginal revenue (MR) and the MC curve cuts the MR curve from below.
What is a monopoly example?
A monopoly is a firm who is the sole seller of its product, and where there are no close substitutes. An unregulated monopoly has market power and can influence prices. Examples: Microsoft and Windows, DeBeers and diamonds, your local natural gas company.
What is an example of a public franchise?
An example of a public franchise is A. the government directly providing sewage services, and an example of a public enterprise is a natural monopoly providing water.
How do you calculate equilibrium in monopoly?
If the industry is a monopoly, then the equilibrium price and quantity is found by equating the marginal revenue curve for the monopolist with the marginal cost curve for the monopolist. The MR curve is MR = 1000 – 2Q while the MC curve is the supply curve. Thus, 1000 – 2Q = Q or Q = 333.3.
How equilibrium price is determined under monopoly?
In this way, monopoly firm enjoys the normal profits. Below the average variable cost, monopolist will stop production. Thus, a monopolist in the short run equilibrium has to bear the minimum loss equal to fixed costs. Therefore, equilibrium price will be equal to average variable cost.
What is the literal meaning of monopoly ‘?
1 : exclusive ownership through legal privilege, command of supply, or concerted action. 2 : exclusive possession or control no country has a monopoly on morality or truth— Helen M. Lynd. 3 : a commodity controlled by one party had a monopoly on flint from their quarries— Barbara A. Leitch.