Key Characteristics of a Monopoly in Microeconomics
In a monopoly, there is only one company that controls the whole market.
This company has more than 25% of the market share.
A monopolist can set prices because there aren’t many similar products available.
This is different from companies in competitive markets.
Monopolies have big challenges that stop new companies from joining the market.
These can include laws, expensive startup costs, or owning important resources.
The product from a monopoly has no close alternatives.
Because of this, people can’t easily switch to another option, which makes demand for it steady even if prices go up.
Monopolists try to earn the most money by finding the point where their costs equal their earnings.
This is shown as MC (marginal cost) = MR (marginal revenue).
When there is a monopoly, customers have fewer options to choose from.
This can lead to problems in the market.
Key Characteristics of a Monopoly in Microeconomics
In a monopoly, there is only one company that controls the whole market.
This company has more than 25% of the market share.
A monopolist can set prices because there aren’t many similar products available.
This is different from companies in competitive markets.
Monopolies have big challenges that stop new companies from joining the market.
These can include laws, expensive startup costs, or owning important resources.
The product from a monopoly has no close alternatives.
Because of this, people can’t easily switch to another option, which makes demand for it steady even if prices go up.
Monopolists try to earn the most money by finding the point where their costs equal their earnings.
This is shown as MC (marginal cost) = MR (marginal revenue).
When there is a monopoly, customers have fewer options to choose from.
This can lead to problems in the market.