Assumption and different types of monopoly

Assumption and different types of monopoly

In monopoly market, there is only one seller for any particular things and there is no alternative product or thing available in the market. In this market, on firm is equal to the whole industry so the demand curve is same & stable demand. In this market, supplier knows the customer interest and income level. In this market, the cross elasticity of product is zero.

Assumption and different types of monopoly

Assumption –

ü  There is only one seller in the market

ü  No alternative product available in the market

ü  Seller want to earn more profit by low level of cost

ü  Full competition in the factor market or raw supply market

ü  One price for all customer

ü  Price is already given for consumer

Different types of monopoly

ü If government provide special right to someone for innovation or research

ü  If a firm get low level of cost and set low price

ü  Full control over particular raw material supply

ü  If government set some regulation

ü  Government services like post office

ü  Government provide license for special production and also save them from out side competition.