What is Monoply?

  • 3 votes

in terms of Economics?

Posted Tue 30th October, 2012 @ 17:53 by Maryam

11 Answers

  • 6 votes

A Monopoly is a Market that is controlled by one firm. i.e. Apple is a monopoly in the market of Macbooks because that product is unique to that firm. No one besides apple can make macbooks there for they have a monopoly.

The Monopolistic firm has control over price and supply because they have no competition. 

A more IB friendly example is the Diamond industry. One company has the majority of control over diamonds and henceforth controls prices and resource allocation based on its needs and wants. Oh, and monopolies have high entrance barriers.

Answered Wed 31st October, 2012 @ 03:50 by Victoria Lawal
  • 3 votes

High entrance barriers basically means: Its very hard for new firms to enter the market and gain some control because all of the power is in the control of one firm. And your Welcome!

Answered Fri 2nd November, 2012 @ 02:54 by Victoria Lawal
  • 2 votes

Points to note:

Monopolistic products (Monopoly market), are differentiated from other firms.

In the UK, if a firms market share is more than 25%, it is legally classed as a monopoly in the market.

Natural monopolys may occur and government intervention will not. A perfect example would be water suppliers, e.g Yorkshire Water supplies Yorkshire with clean, fresh water. It would be extremely costly, due to the high barriers of entry (installation of pipes), for a competitor to enter the market. Therefore Yorkshire water is a natural monopoly.

Answered Mon 17th December, 2012 @ 12:16 by Connor
  • 1 vote

Monopolies can be good and bad, in an evaluation of companies that are monopolies its important to look at for and against:

+They drive down prices with economies of scale- like boots and alliance pharmacies.

-Prices increase because customers have no alternatives to buy- this would happen when there is only 1 company in the market.

-Quality decreases because demand is inelastic, because of the above point.

Answered Wed 2nd January, 2013 @ 18:37 by Fifi Ghaith
  • 0 votes

Thanks alot, btw what do you mean by high entrance barriers?

Answered Wed 31st October, 2012 @ 17:46 by Maryam
  • 0 votes

Thanks again, btw did you take A2 economics?

Answered Wed 7th November, 2012 @ 19:54 by Maryam
  • 0 votes

Sorry for the late response but no, Im in IB Econ Standard level, next year i'll be in Higher level.

Answered Sun 18th November, 2012 @ 23:24 by Victoria Lawal
  • 0 votes

where a firm has over 25% of market share

Answered Tue 1st January, 2013 @ 21:01 by .
  • 0 votes

Monopolies disencourage competition and innovation, and thus they can be considered bad things, meaning the government may step in to stop companies from growing too big by disallowing them to merge or take over other small firms.

Answered Sun 27th January, 2013 @ 22:06 by izzy
  • 0 votes

Also check out this website. It has plenty of revision material with lots of further reading material.

www.economicsandi.blogspot.co.uk

Answered Sat 2nd February, 2013 @ 12:12 by rishabh malu
  • -4 votes

is a board game

Answered Thu 6th December, 2012 @ 12:30 by max jenkinson