Complete monopoly Essay

Today, m both a nonher(prenominal) firms be roll in the haying a monopoly of their products/ avails in the grocery store. Monopoly may be defined as the sleep together hold in over a good enjoyed by a incident company in the market place. There pass on be totally a solely manufacturing business or provider of the commodity and customers w be to depend on them whenever in that respect is a demand since in that respect be no substitutes available. As a result, such(prenominal) a manufacturer can get to an absolute envision over the value as well as quantity available in the market.Another arrive at enjoyed by the monopolies are that they do not face any risk of an oppo rank give ining the market. In order to plant do monopoly, unremarkably companies take circumspection of the following things 1. They follow the complete control over the key raw materials indispensable for manufacturing the product. 2. They may acquire a letters patent in order to be the entirely manufacturers or providers of the product or wait on. 3. They acquire the technical and productive efficiency to touch the market demand for their commodity.Usually a commodity produced by the monopolies will be manufactured in fewer quantities only and their cost may be higher(prenominal)(prenominal). Since in that respect is no market arguing, the improvements are broadly enjoyed by the manufacturers. Little are the benefits obtained by the consumers, since they subscribe no choice when a demand arises. FEATURES OF MONOPOLY The following are the master(prenominal) features of a monopoly market 1. In a monopoly, there is a solo manufacturer or provider of a commodity. So all the demands in the market are to be met by this single vendor.2. Highest benefits are enjoyed by the solo manufacturer. 3. The value, quantity as well as the quality of the commodity is the absolute decision of the manufacturer. Normally, commodities available in a monopoly market will have a higher price. 4. There is no competition or substitutes in a monopoly market. Even if a contender wants to enter a market, it is a very ticklish task. TYPES OF MONOPOLY There are various types of monopoly habitual in the market. Various classifications have been make based on varied criteria.This class checks in detail the classifications 1. Based on ownership a. Public Monopoly In a prevalent monopoly, the product/service is provided and controlled by the Government of the country. Unlike other monopolies, human beings monopoly does not depend upon maximizing advantage theory. Rather it is concentrated on the benefits of the people. For example, the embrocate Industry in Abudhabi is the monopoly of ADNOC. There are no competitors to ADNOC and still gasoline is provided to the residents at a reasonable price. b.Private Monopoly In strong contrast to public monopoly, in the slip of paper of private monopoly, the product/service is provided and controlled by private firm o r an individual. Their main concentration will be on maximizing the profit and thusly such commodities will have a higher price. For example, the diamond manufacturers De Beers enjoyed a complete monopoly over the market for about blow years. In a drive to win maximum profits, they created a false concept that the diamond supply was becoming limit and hence increased the rates which mount up their profits. 2.Based on the price a. Simple Monopoly In the case of artless monopoly, the price of a product/commodity is the same regardless of the customers. Usually it has control in a particular market only. For example, the water supply in Abu-Dhabi is taken care of by ADWEA. The price charged is the same across the emirate indicating a innocent monopoly. b. Discriminating Monopoly In the case of a discriminating monopoly, the price is discriminated according to the customers. such a commodity will have different prices in different regions. Normally, such a firm has control in v arious markets.For example, the cost of Mercedes Benz car is different in different countries of the world. In Germany, where it is manufactured, it is usually sold at a comparatively lower price. In UAE, the price is higher than that in Germany. In India, the price is higher than that in UAE. 3. Based on competition level a. Perfect Monopoly In perfective tense monopoly, there is absolutely no flagellum from any competitors. Such firms enjoy complete control without the fear of any competitor entering the market. This is the around ideal case and is difficult to be established in realty. b.Imperfect Monopoly In imperfect monopoly, there is no competitor in appearance. further the company may be in the fear of an opponent entering the market in the near future. As the make up indicates, the seller do not enjoy the complete features of an ideal monopoly because there is a threat of competition. For example, until recently Etisalat enjoyed the monopoly of telecommunications and i nternet go in the UAE. But with the entry of du, Etisalat is cladding an imperfect monopoly as du is widening its service to all the realms of Etisalat. 4. Based on how the monopoly is achieved.a. sound Monopoly Legal monopoly is usually the monopoly acquired by a firm by legal procedures with the stock-purchase warrant from the Government. Copyrights, trademarks, patents etc are legal tools for obtaining monopoly over a product or service. For example, the company Telstra acquired a legal monopoly over providing telecommunications service in Australia. b. Natural Monopoly Natural Monopoly is the monopoly obtained naturally without any legal procedures. Such a monopoly is obtained referable to the advantage of good-will, plentiful resources, good site etc.For example, Middle East enjoys a natural monopoly over the gasoline resources in the area. CONCLUSION Although many firms enjoy a monopoly over their products, seldom do such regulations benefit the customers, except for the c ase of public monopoly. Since there no competitions, the competitive advantage is also denied to the customers and mostly they are constrained to buy the product despite their hesitation. However, monopoly is most enjoyed by the firms exercising it.REFERENCES 1. Goodwin, Nelson, Ackerman, Weissskopf. (2009). Microeconomics, 2nd edition.