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markets, - Coggle Diagram
markets
monopoly markets
what is it
a monopoly market is a market where one single firm is ruling the entire market and making decisions withn it. market. They can make decisions like: 1. setting the prices, 2. reduce the quality of the goods and services provided; 3. destroy new firms trying to enter the market
advantages
for consumers
- less variety, meaning more resources can be allocated for a certain good or service, increasing quality
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disadvantages
- less variety (consumers might want changes in the products various products)
characteristics
- The monopoly decides the price of the good or service they are supplying - PED is inelastic as they are the only firm supplying the good.
- The firm can reduce the quality of the good without demand being affected
- the firm might produce goods of very little variety
- there are barriers that new firms have to cross to enter the market. It will be very hard for new firms to survive in this type of market as the bigger firm will destroy its market share by lowering prices below the new firm's avg costs
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Market Structure
Has four features, that change the structure of the market
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