Therefore, the monopolist can determine the price of his own choice and refuse to sell below the determined price.

Remember, a monopoly can only exist when the cross-elasticity of the product that the monopolist produces is zero. If a close substitute exists, then the monopoly cannot exist. In a monopoly, the product that the monopolist produces has no close substitute. Since there are several buyers, an individual buyer cannot affect the price in a monopoly market. Therefore, the firm’s demand curve is the industry’s demand curve. This is because there is only one producer and/or seller. Also, in a monopoly, there is no difference between the firm and the industry. The primary feature of a monopoly is a single seller and several buyers.

Equilibrium under Monopolistic CompetitionĪfter monopoly definition, let’s take a look at the features of a monopoly: Single seller and several buyers.

Equilibrium under Perfect Competiton – II.

Equilibrium under Perfect Competiton – I.

Pure monopoly suggests a no substitute situation.‘ Browse more Topics under Analysis Of Market The monopolist’s demand is the market demand. Braff – ‘ Under pure monopoly, there is a single seller in the market.

Therefore, for all practical purposes, it is a single-firm industry. In economics, a monopoly refers to a firm which has a product without any substitute in the market. The term monopoly means a single seller ( mono = single and poly = seller).

Casino monopoly economics