For example, if a company develops and patents a drug to cure brain cancer, that company has a legal monopoly over that drug. Technological monopolies occur when the good or service the company provides is has legal protection in the form of a patent or copyright. Imperfect monopolist has to worry about is losing customers to producers of distantly related products. We will simply note that because the pure monopolist does not have to worry about competitors in reducing price, it can raise its price without fear that customers will not move to other producers of the same product or similar products In the case of imperfect monopoly there are close substitutes. Pure monopoly there will be a single seller of a product for which there are no close substitutes. A monopoly may also form when a company has a copyright or patent that prevents others from entering the market. Its demand curve slopes downward to the right.For example, in Saudi Arabia the government has sole control over the oil industry. He determines the price and this price will determine how much he is able to sell. The firm is the industry since it is the only producer in the market. In monopoly, there is no distinction between firm and industry. Furthermore no other seller can enter the market.
State Electricity Board you travel by railway train owned and run by government of India. For example, you get your electricity supply from one agency, that is.
Since the monopoly is the only seller in the market, it has neither rivals nor direct competitors. Thus, pure monopoly is market structure in which a single firm is the sole producer of a product for which there are no close substitutes. The term monopoly is derived from the Greek word monopolin which means exclusive sale.
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