What is Monopoly in economics? Types and Characteristics.

What is Monopoly? Types and Characteristics. 

Definition - Monopoly is a market structure in which a single seller in the market of a particular goods and services to provide consumers. 

Factors create Monopoly in the market 

1.High starting price of goods and services 2.Unique product 

3.Government licence

4.Patent 

5.Single Owner of resources 

6.Copyright

Description 

Monopoly is a firm of market organization for a commodity. Monopoly is the Latin word which composed of two words mono which means single and poly which means a seller. Thus we can say in the market only one seller of the commodity is called monopoly. In the Monopoly the seller being a soul seller has full control on the market of the commodity. In which a seller set prices of commodity according to his building because there's no one in the market who create competition with the person.  If The buyer want to purchase the particular good or service then buyer has to purchase the commodity from the seller with the price which is made by the monopolist. Monopolist create Blue Ocean, further strong barriers entry into the industry.  hence we can say that a monopolist is a price maker. there is no one by whom buyer could purchase. The buyer has only one option that he must purchase the commodity from the monopolist. 

Characteristics of Monopoly

1. Monopolist cannot determine both quantity and the price of the product simultaneously. 

2. Monopolist is the price maker Not price taker. 

3. Monopolist has full control on the supply of the product. 

4. Ab Monopoly may be individual proprietorship joint stock company partnership government company or cooperative society. 

5. Under Monopoly there is one producer of seller of the particular product or service. 

6. Under Monopoly a firm itself is an industry. 

7. A Monopoly is not found in the real world. 

Types of Monopoly

1.Natural monopoly :- natural monopoly is a type of monopoly that arises in certain industry due to the nature of the market. In the Monopoly are commodity is localized in a single place. When a Farm provide goods and services in the lower price than any potential competitor with the result the firm dominating in the market. Monopoly create for many reasons. 

Ex. The cost of production might be very high due to initial investment, due to the heavy investment in the industry there is no one to take risk except some of the does the region the high investment creates barriers entry and it creates Monopoly in the market. We take another example of monopoly best depend on single place like India and Bangladesh India has the high quality of Manganese and Bangladesh had jute. 

2.legal monopoly :- a legal Monopoly is a type of monopoly which is granted by the government throw legal rights. In the legal Monopoly a firm is given the legal right to produce a unique product or service by the government. This allowed a single company to have control over the production and distribution of the particular commodity in the spacific Geographic area or in the industry. 

Ex. The Reserve Bank of India only has a right to issue the currency of India thus it is a legal monopoly. 

3.public Monopoly :- it is one of the type of monopoly when Monopoly is created for the interest of the public then it is called as a public monopoly, it is monopoly that is owned by the government or the government agency. 

 4.private monopoly:- private Monopoly is the type of monopoly that is owned by the single private company or the firm. In this monopoly the monopolist company or the firm has right to production and distribution of goods without any competition.