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.
Nosubstituteproduct 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.