Q. Show the Characteristics of monopoly?
Let's summarise the main characteristics of monopoly as under:
- Cross-elasticity of demand for a monopoly product is zero in the case of pure monopoly and very low in the case of simple monopoly.
- There are no close substitutes for a monopoly product.
- There is absence of competition.
- There is a single producer of a commodity. The monopolistic firm has control over supply of its commodity.
- There is no distinction between firm and industry under monopoly.
- A monopolist will prevent entry of new firms in the long run.
- Cases of pure monopolies are not found in developed countries. However, such cases of pure monopolies are found in developing countries.