Following are the features of monopoly:
1. A single seller has complete control over the supply of the commodity. 2. There are no close substitutes or competition for the product. 3. There is no free entry and exit because of some restrictions. 4. There is a complete negation of competition.
5. Monopolist is a price maker. The monopolist can either charge a high price for customers or adopt price discrimination policy if there are different types of buyers. 6. Since there is a single firm, the firm and industry are one and same. i.e., firm coincides the industry. 7. Monopoly firm faces downward sloping demand curve. It means he can sell more at lower price and vice versa. Therefore, elasticity of demand factor is very important for him. 8. There will be opportunities for supernormal profits under monopoly, because market price is greater than the cost of production.
In economics, the term for charging different prices to different customers is called price discrimination. Economists have actually defined multiple types of price discrimination, called first-degree price discrimination, second-degree price discrimination, and third-degree price discrimination. 1. First-degree price discrimination- It is an attempt by the seller to leave the price unannounced in advance and charge each customer the highest price they would be willing to pay for the purchase. If perfectly executed, this would meet the ideal of getting the greatest revenue possible from sales. Perfect execution of first-degree price discrimination is unrealistic because customers have an incentive to not reveal how much they would be...