Perfect competition



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Bog'liq
Monopoly

Imperfect Markets

  • Monopoly is an industry composed of only one firm that produces a product for which there are no close substitutes and in which significant barriers exist to prevent new firms from entering the industry.

Pure Monopoly

  • A pure monopoly is an industry with a single firm that produces a product for which there are no close substitutes and in which significant barriers to entry prevent other firms from entering the industry to compete for profits.

Barriers to Entry

  • Things that prevent new firms from entering and competing in imperfectly competitive industries include:
  • Government franchises, or firms that become monopolies by virtue of a government directive.
  • Ex : Television stations, Cable TV Company

Barriers to Entry

  • Things that prevent new firms from entering and competing in imperfectly competitive industries include:
  • Patents or barriers that grant the exclusive use of the patented product or process to the inventor.
  • Example: IBM has the exclusive right to produce its patented computers, Basmati rice production in India etc.

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