This is a basic term
related to market type in business. This term consists of two words lets break
them into single and understand. So before monopoly lets see what is market,
Market consists of buyers and sellers and when both of them meet at an certain
place to sell or buy products or a service it is called market, or a place
where companies meet to crack a certain deal it is called market. Market itself
is an very large field to understand, it consists of various other terms in the
market like offline market, online market (which is the fastest growing market
now a days), competitors, different market situations (perfect competition,
imperfect competition and monopoly), start-ups, etc.
Offline market is local
market place like a certain place which is situated on a ground bases, where
there are shops and sellers. The customers visit to the place to buy the product
and services. Whereas online market is an virtual market it is also called as
e-commerce this is the fastest growing market as the audience have got less
time to visit on a place and buy stuff. Online market has given there customers
ease of buying product and services from home with no much efforts. The best
example for offline market are local grocery stores and flipkart provides us
the best example for e-commerce market. But due high competition from
e-commerce market some of the offline sellers are also taking there business
virtually. For example Dmart has got its offline market but due to high
competition and demand from customers it has now come up with its own
e-commerce website.
Now lets see what is
monopoly, so monopoly is formed by adding up two Greek words, monos meaning
alone or a single and polein meaning to sell. So monopoly market is a market
situation where there is only single seller or supplier of a certain product,
commodity or a service. Which is a drawback for the customers as they have
certainly got no options and are forced to buy their service or product. But
completely opposite to that the seller enjoys his monopolistic position in the
market and can raise the price as per his will due to no competition and no
other buying option for the buyers. Monopoly market is a profit maximizer as
seller has got power of pricing high. Monopoly market has got high entry
barriers opposite of the perfect competition market where seller can freely
enter or exit the market.
Monopoly market are of
different types:
- Absolute Monopoly : It is also known as pure monopoly situation, Where the seller enjoys complete monopoly situation in the market with no competition, The sellers holds the complete supply chain. In this market there is not even a remote substitute to the product. Pure monopoly situation very tough to happen in todays world. It almost never happens.
- Imperfect Monopoly : It this market situation the sellers holds the full supply chain of the product with no close substitute but it may have a remote substitute.
- Legal Monopoly : It is a type of monopoly where there is only one seller in the market due to some legal barrier or government interference.
The best real life
example of monopolistic market situation is Indian Railways as there is no
other competition to Indian Railways and also there is no interference of
private companies due to legal government barrier. But certainly it has got remote
substitute of other transportation system like bus, airplanes, and personal
transportation so it can not be called pure monopoly situation. But it can be
counted as monopolistic situation as it has got no close substitute and
competition.
This was helpfull, great one
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