ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In a monopolistic market, there is only one firm that dictates the price and supply levels of goods and services, and that firm has total market control.

Detailed explanation-2: -What is Monopoly. Definition: A market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute.

Detailed explanation-3: -According to general equilibrium economics, a free market is an efficient way to distribute goods and services, while a monopoly is inefficient. The inefficient distribution of goods and services is, by definition, a market failure.

Detailed explanation-4: -The correct sequence of the market structure from most to least competitive is perfect competition, imperfect competition, oligopoly and pure monopoly.

Detailed explanation-5: -A monopoly exists when there’s a single firm that controls the entire market. The firm and industry are synonymous. This firm is the sole producer of a product, and there are no close substitutes. Because there are no alternatives, the firm has the highest level of market power.