ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -One characteristic of a monopolist is that it is a profit maximizer. Since there is no competition in a monopolistic market, a monopolist can control the price and the quantity demanded. The level of output that maximizes a monopoly’s profit is calculated by equating its marginal cost to its marginal revenue.

Detailed explanation-2: -The third type of profit is monopoly profit, which occurs when a firm restricts output so as to prevent prices from falling to the level of costs. The first two types of profit result from relaxing the usual theoretical assumptions of unchanging consumer tastes and states of technology.

Detailed explanation-3: -In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute. Description: In a monopoly market, factors like government license, ownership of resources, copyright and patent and high starting cost make an entity a single seller of goods.

Detailed explanation-4: -Under a monopoly there is only one firm that offers a product or service, experiences no competition, and sets the price, thus making it a price maker rather than a price taker. Barriers to entry are high in a monopolistic market.