A monopoly is “a market structure with only one seller of a particular product.”(175)
There are 4 types of monopolies:
· Natural monopoly is “a market situation where the costs of production are minimized by having a single firm produce the product.”(176) Example: telephone companies, public utility companies, etc.
· Geographic monopoly is a monopoly “based on the absence of other sellers in a certain geographic area.”(176) Example: gas stations
· Technological monopoly is a monopoly “that is based on ownership or control of a manufacturing method, process, or other scientific advance.”(176)
· Government monopoly is a monopoly “owned and operated by the government.”(177)
An oligopoly is a “market structure in which a few very large sellers dominate the industry.”(174) The products have different features, or it may be standardized.
A. Interdependent Behavior
A.1. Collusion: “A formal agreement to set specific prices or to otherwise behave in a cooperative manner.”(174)
A.2. Price-fixing: “Agreement to charge the same prices for a product.”(175)
Perfect competition: “It is a market structure characterized by a large number of well informed independent buyers and sellers who exchange identical products.”(170)
· Imperfect competition
Monopolistic competition: “It is a market structure that has all the conditions of perfect competition except for identical products.”(173)
· Product differentiation
· Nonprice competition
There are 4 types of monopolies:
· Natural monopoly is “a market situation where the costs of production are minimized by having a single firm produce the product.”(176) Example: telephone companies, public utility companies, etc.
· Geographic monopoly is a monopoly “based on the absence of other sellers in a certain geographic area.”(176) Example: gas stations
· Technological monopoly is a monopoly “that is based on ownership or control of a manufacturing method, process, or other scientific advance.”(176)
· Government monopoly is a monopoly “owned and operated by the government.”(177)
An oligopoly is a “market structure in which a few very large sellers dominate the industry.”(174) The products have different features, or it may be standardized.
A. Interdependent Behavior
A.1. Collusion: “A formal agreement to set specific prices or to otherwise behave in a cooperative manner.”(174)
A.2. Price-fixing: “Agreement to charge the same prices for a product.”(175)
Perfect competition: “It is a market structure characterized by a large number of well informed independent buyers and sellers who exchange identical products.”(170)
· Imperfect competition
Monopolistic competition: “It is a market structure that has all the conditions of perfect competition except for identical products.”(173)
· Product differentiation
· Nonprice competition
