Chapter 5. Forms of Market 2. Types of monopoly/Explain the types of Monopoly. economics HSC Maharashtra board

Balbharati solutions for Economics HSC 12th Standard Maharashtra State Board

 

Chapter 5. Forms of Market

2. Types of monopoly/Explain the types of Monopoly.

Meaning: -

The term “MONOPOLY” is derived from two Greek words “Mono” which means “Single” and “Poly” which means “Sellers”. Thus Monopoly refers to “market structure in which a single seller controls the entire market”. And therefore the seller is a price maker and not the price taker. 

The following are some of the types of monopolies:

Pure, perfect or Absolute Monopoly: -
A pure or perfect monopoly means that the firm controls the supply of a product for which there is not even a remote (close) substitute. Such a monopoly is very rare.

Natural Monopoly: -
The monopoly power is acquired due to natural advantages such as good location, control over scarce resources, involvement of huge investment, etc.

Legal monopoly: -
It arises due to legal protection given to the producer in the form of patents, trade marks, copyrights, etc. The law prevents potential competitors from  producing identical products.

Technological monopoly: -
Big firms enjoy technological monopoly due to their superior technology and economies of scale. Other firms do not have the access to such technology cannot produce the quality goods produced by big firms.

Simple monopoly: -
In a simple monopoly the firm has monopoly power over a product or service, but it charges a uniform price to all the buyers.

Discriminating monopoly: -
In a discriminating monopoly, the firm charges different prices to different buyers in the same market or in different markets fir the same product.

Private monopoly: -
When an individual or a private firm controls the production it is regarded as private monopoly.

State or Social Monopoly: -
When the government owns and controls the production of a good or services it is called state or social monopoly.