Monopoly Questions and Answers

Topics: Economics, Monopoly, Price discrimination Pages: 4 (801 words) Published: November 21, 2012

1-What is the characteristic of the monopoly?

1 - The existence of a single product of the commodity
2 - characterized by prices, rising prices prevailing
3 - the relative stability of prices
4 - There are barriers to enter the industry monopolist
5 - not necessary to advertise

Another Monopoly properties.

Price control.

In a monopoly, and at the expense of supply in the market one entity to control and demand, and the degree of the price offered and the control exercised by the institution or individual is greater.

Predatory pricing.

This feature of the advantages of a monopoly consumers. These are short term market gains when prices dropped to meet the demand of rare product. Suppliers and consumers directly benefit from an attempt to monopolize the company to increase the sale of business marketing.

Price flexibility

With regard to the demand for the product or service offered by the company monopoly or individual, and is dictated by the price elasticity of the ratio of the absolute value of the increase in prices and demand in the market.

Lack of creativity

At the expense of absolute control of the market, and monopolies display a tendency to lose efficiency over a period of time. With one product lifetime, and innovative design and marketing techniques rear seat.

Lack of competition.

When the market was designed to serve the monopoly and the lack of commercial competition or the lack of goods and viable products shrinking the scope of "perfect competition."

2-How monopoly arises

Monopoly arises in a variety of circumstances: there are types of goods and a service does not accept by its nature, or not in the public interest to multiple producers, it's called natural monopolies, for example: to provide the city with water, electricity, or the trains running between two countries. Often assume the state or municipal authorities to manage these services, or to grant...
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