Explain any three features of monopoly.

1.	Explain any three features of monopoly.
Answer» Features of Monopoly are : (i) One Seller and Large Number of Buyers : The monopolist’s firm is the only firm; it is an industry. But the number of buyers is assumed to be large. (ii) No Close Substitutes : There shall not be any close substitutes for the product sold by the monopolist. The cross elasticity of demand between the product of the monopolist and others must be negligible or zero. (iii) Difficulty of Entry of New Firms : There are either natural or artificial restrictions on the entry of firms into the industry, even when the firm is making abnormal profits. (iv) Monopoly is also an Industry : Under monopoly there is only one firm which constitutes the industry. Difference between firm and industry comes to an end.

Answer»

Features of Monopoly are :

(i) One Seller and Large Number of Buyers : The monopolist’s firm is the only firm; it is an industry. But the number of buyers is assumed to be large.

(ii) No Close Substitutes : There shall not be any close substitutes for the product sold by the monopolist. The cross elasticity of demand between the product of the monopolist and others must be negligible or zero.

(iii) Difficulty of Entry of New Firms : There are either natural or artificial restrictions on the entry of firms into the industry, even when the firm is making abnormal profits.

(iv) Monopoly is also an Industry : Under monopoly there is only one firm which constitutes the industry. Difference between firm and industry comes to an end.

Discussion

No Comment Found

Related InterviewSolutions

A plant is kept in a dark cupboard for about 48 hours before conducting any experiment on photosynthesis to :(A) Remove starch from the plant. (B) Ensure that starch is not translocated from the leaves. (C) Remove chlorophyll from the leaf of the plant. (D) Remove starch from the experimental leaf.
The producer of Lime Fresh’ tea introduces ‘Buy one Get one’ scheme on all the products of ‘Lime Fresh’. Identify the promotional strategy’ used by the producer. State any one objective that could be met by this strategy.
A stringed musical instrument, such as the sitar,is provided with a number of wires of different thicknesses. explain the reason for this.
Mention whether the following would result in inflow, outflow or no flow of cash :(i) Issue of fully paid Bonus Shares (ii) Cash withdrawn from Bank
State with reason whether the following would result in inflow, outflow or no flow of cash :(i) Charging depreciation on furniture. (ii) Cash withdrawn for bank for office use.
Give four points of anatomical differences between a monocot stem and a dicot stem.
State the conditions required for total internal reflection of light to take place.
State the conditions required for total internal reflection of light to take place.
(i) When does a ray of light falling on a lens pass through it undeviated ? (ii) Which lens can produce a real and inverted image of an object ?
When acoustic resonance takes place a loud sound is heard. Why does this happen ? Explain.