Cards (9)

  • Pure Monopoly is a market structure where one company is a single source for a product and there are no close substitutes for the product available.
  • CHARACTERISTICS OF PURE MONOPOLY:
    • Sole supplier
    • No substitute product
    • No rivals/competitors
  • Sole supplier is the only supplier which the company sets and dictates the market price and the availability of a product.
  • No substitute product represents that pure monopolistic markets exist for selling a particular product.
  • No rivals/competitors show that they cannot be included in pure monopolistic markets.
  • BARRIERS IN A PURE MONOPOLY:
    • Legal Barriers
    • Control of Resources
    • Economies of Scale
  • Legal Barriers refer to patents and copyrights of the products and brands
  • Control of Resources => resource providers have exclusive rights to produce a particular product. However, other companies cannot enter the market because they do not have the resources to produce that particular product.
  • Economies of Scale => occur when the total production cost decreases due to increased production.