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Non-Competitive Markets — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsNon-Competitive Markets6 Marks
Question
Explain the features of monopoly market.
✓

Answer

"Monopoly is a market situation in which there is a single seller. There are no close substitutes of the commodity it produces, there are barriers to entry"
Features of monopoly:
  1. 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.
  1. 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.
  1. 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.

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