Characteristics of Monopoly market
1. Single seller: Monopoly market has only one seller or producer that controls the entire market. This seller has a significant market share and market power.
2. Barriers to entry: Monopoly market is characterized by high barriers to entry, such as high start-up costs, exclusive access to resources, legal restrictions, and economies of scale. This makes it difficult for new competitors to enter the market.
3. Price control: In a monopoly market, the seller has control over the price of the product or service. The seller can set prices higher than in a competitive market, leading to higher profits.
4. Unique product: The product or service offered by the monopolist is unique and does not have close substitutes. Consumers do not have other options to choose from, leading to a lack of competition.
5. Limited consumer choice: In a monopoly market, consumers have limited choices as there is only one seller in the market. This can lead to exploitation of consumers through high prices and poor quality products.
6. Market power: The monopoly seller has significant market power and can influence the market by controlling prices, output, and distribution. This can lead to inefficiency and lack of innovation in the market.
7. Maximization of profits: In a monopoly market, the main goal of the seller is to maximize profits by setting prices higher than in a competitive market and limiting output to increase demand.
8. Government regulation: Monopoly markets are often subject to government regulation to prevent abuse of market power by the monopolist. Antitrust laws and regulations are in place to promote competition and protect consumers.