Monopoly and Monopsony
CHAPTER 10
MARKET POWER:
MONOPOLY AND MONOPSONY
R.KANAKARAJU 215112019
A.GOUTHAM SAI 215112020
B.R.PRADHEEP 215112027
M.PRABHAKAR 215112058
K.ADITHYA 215112063
NAGENDRA 215112069
MARKET POWERS: MONOPOLIST AND MANOPSONIST Markets comprises of products or services, buyers and sellers. Where as in a perfectly competitive market there will be a reasonably good number of buyers and sellers of the products or services. So the possibility of influencing the market by a single seller or buyer is nil. Depending upon the supply and demand prices will be determined. Market price and demand is the deciding factor of the companies to estimate how much to produce and sell, in consumers view it is a deciding factor how much to buy. In contrary to the case which was discussed above, if the market is not a perfectly competitive market then the situations of monopoly and monopsony arise. Monopoly market is the one which has only one seller but so many buyers. Monopsony market is the one which has only one buyer and so many sellers.
Monopolist is the sole producer of a product, in market demand curve, price is determined by the quantity which is offered by the monopolist to sell, the quantity of produce sold by monopolist is low and the price is high, it happens because his products has full demand and he wants to take full advantage in this situation. Normally if the price is high, only a few buyers which have the potential to buy those goods will turn towards the seller. Pure monopoly is a bit rare but in actual existing market, in many sectors only a few sellers available. This gives an advantage to them because their scarcity, if these sellers syndicate then it would lead to stronger monopoly and they gain the monopoly power and have a firm control over selling price this tends them to enjoy higher margins and better profitability.
In monopsony, a single buyer is available for a lot of sellers. In this price
MARKET POWER:
MONOPOLY AND MONOPSONY
R.KANAKARAJU 215112019
A.GOUTHAM SAI 215112020
B.R.PRADHEEP 215112027
M.PRABHAKAR 215112058
K.ADITHYA 215112063
NAGENDRA 215112069
MARKET POWERS: MONOPOLIST AND MANOPSONIST Markets comprises of products or services, buyers and sellers. Where as in a perfectly competitive market there will be a reasonably good number of buyers and sellers of the products or services. So the possibility of influencing the market by a single seller or buyer is nil. Depending upon the supply and demand prices will be determined. Market price and demand is the deciding factor of the companies to estimate how much to produce and sell, in consumers view it is a deciding factor how much to buy. In contrary to the case which was discussed above, if the market is not a perfectly competitive market then the situations of monopoly and monopsony arise. Monopoly market is the one which has only one seller but so many buyers. Monopsony market is the one which has only one buyer and so many sellers.
Monopolist is the sole producer of a product, in market demand curve, price is determined by the quantity which is offered by the monopolist to sell, the quantity of produce sold by monopolist is low and the price is high, it happens because his products has full demand and he wants to take full advantage in this situation. Normally if the price is high, only a few buyers which have the potential to buy those goods will turn towards the seller. Pure monopoly is a bit rare but in actual existing market, in many sectors only a few sellers available. This gives an advantage to them because their scarcity, if these sellers syndicate then it would lead to stronger monopoly and they gain the monopoly power and have a firm control over selling price this tends them to enjoy higher margins and better profitability.
In monopsony, a single buyer is available for a lot of sellers. In this price