The supplier has almost full control over the market and can influence the market through its decisions. An imperfect market exists in a monopoly i. A monopoly is just the opposite of a Perfectly Competitive Market Structure. The following characteristics in regard to a monopoly market structure are there in a market:
Demand of consumers for the product. Due to economic, institutional, legal or any other reason. Due to economies of scale. Due to the dominance of the whole market, they enjoy the benefit of large scale production.
The salient features of monopoly are as under: There is only one seller in the whole market who produces or supplies a product. Entry to such a market is restricted due to factors like license, ownership of resources, etc.
There are no close substitutes of the commodity offered by the monopolist. In a monopoly market, there is no competition and so the monopolist overcharges the prices of products. This practice is followed to reap maximum revenue, to dispose of the excess stock or to capture foreign markets.
The oligopoly exists in the market, where there are 2 to 10 sellers, selling identical, or slightly different products in the market.
According to experts, oligopoly is defined as a situation when the firm sets its market policy, as per the anticipated behavior of its competitors. The other feature of this type of market is the use of marketing tools like advertising to get the maximum market share. The following are the various forms of oligopoly: Collusive oligopoly is when the firm act, in cooperation with other firms in the market in setting the price and output.
Competitive oligopoly is when the cooperation is missing between firms, and they compete with one another. Perfect oligopoly is when the product is identical in nature. Imperfect oligopoly is when firms sell different products. Open oligopoly is when the new firms are free to enter. Closed oligopoly is when restrictions are there for entering the market.
Others include partial or full oligopoly, syndicated or organized oligopoly, etc. Key Differences Between Monopoly and Oligopoly The following are the major differences between monopoly and oligopoly: Monopoly refers to a type of market, having a single seller dominating the whole market.
In monopoly as there is a sole seller of a product or provider of service, the competition does not exist at all. In a monopoly, there is only one player in the entire market, but in oligopoly, the range of players is 2 — 10, in the market. In a monopoly, the seller dominates the market by selling a unique product for which no substitute is available.
Conversely, in oligopoly, the product or service offered by the firm are either similar or different having close substitutes.
In monopoly the price discrimination exist, different customers have to pay a different price for the same product. In an oligopoly, the firms set the product price on the basis of the price of the same product offered by the rival seller in the market, which is just opposite in the case of monopoly, as there are no rivals.
Example Monopoly Practically, the monopoly can be seen in services related to the public utility like transport, electricity, water and so on. Oligopoly One can find oligopoly in industries like a cold drink, automobile, telecommunication etc.
Conclusion In practical life, we find monopoly in transport like railways and other public utility services only, but oligopoly exists in many industries of the economy like the automobile industry, telecommunication industry, soft drink industry, plastic industry, etc.When discussing the presence of a monopoly or oligopoly, seller is the key word, and even though most diamond mines have multiple owners, usually only one entity manages the operations of the mine.
The Oligopoly Market characterizes of a few sellers, selling the homogeneous or differentiated products. In other words, the Oligopoly market structure lies between the pure monopoly and monopolistic competition, where few sellers dominate the market and have a control over the price of the product.
A telecommunications provider would be an example of an industry that could be governed by an oligopoly, or even a monopoly. The Indian railways, on the other hand, are a great example of an. In economics, an oligopoly is a market structure where the industry is dominated by a small number of sellers (oligopolists).
The dominant sellers, since they are so few in number, are each likely to be aware of the actions of the others. The decisions of one firm influence, and . Pharmaceutical Industry The pharmaceutical industry is becoming an oligopoly due to the staggering costs of developing and marketing new drugs and because of .
In a monopoly, there is only one player in the entire market, but in oligopoly, the range of players is 2 – 10, in the market.
In a monopoly, the seller dominates the market by selling a unique product for which no substitute is available.
Monopolistic Competition; Oligopoly; Monopoly arises when a single firm sells a product for which there are no close substitutes. Microsoft, for instance, has been considered a monopoly because of its domination of the operating systems market. Another example is the U.S. soft drink industry, which is dominated by Coca-Cola and Pepsi. Difference Between Monopoly and Monopolistic Competition June 1, By Surbhi S 1 Comment Monopoly refers to a market structure where there is a single seller dominates the whole market by selling his unique product. Sign Out. Home Companies Money Industry Technology Politics Opinion Lounge Multimedia AI Science Education Sports Consumer Specials Companies Money Industry Technology Politics Opinion Lounge.