Intro to monopoly
True or False:
A monopoly market has very little to no competition.
True
How many suppliers?
1 main strong supplier
True or False
Prices are not stable in a monopoly market structure
False
True or False
In a monopoly market, prices are lower for consumers
False
State a monopoly other than Google
We'll search the answer on the spot
The monopoly or the controlling business is who dictates price levels.
State the 3 pros from the supplier's pov
Minimal competition
Cheap to run
Massive profits
Why do we see that the monopoly market structure should be discouraged?
Taking in account the pros and cons, we see that the monopoly market structure should be discouraged as only one supplier is gaining from it. The consumers and workers both are affected by it in a negative way.
What does the monopoly power limit to consumers?
Substitutes
Why is it difficult to enter the market?
Since the market leader can take decisions using its power to create obstacles for new businesses that are attempting to enter the market.
Why do suppliers gain massive profits?
Because since they are the only source of whatever product they are selling, everyone is buying from them hence them earning a lot of money
Why is it hard to exit the market?
Since there is a limited amount of suppliers it is very difficult for the market leader to exit as there aren’t other substitutes or many other suppliers offering this same product.
A monopoly market is when one business is selling a single product, the business controls ________ or above of the market share.
80%
Why is it difficult to exit the market?
Since there is a limited amount of suppliers it is very difficult for the market leader to exit as there aren’t other substitutes or many other suppliers offering this same product.
Why does innovation effect the consumer in a good way?
Because innovation leads to the creation of new products so it gives more options to the consumer
How does a monopoly market lead to less innovation and product improvement?
Due to a lack of competition, monopolistic businesses will not be inspired to innovate or improve their products. Since the experience would remain at the same quality over time, this won't be good for the customers.