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Monopoly for Its Emergence Notes For Class 12 Economics

Monopoly for Its Emergence Notes For Class 12 Economics

Monopoly for Its Emergence Notes For Class 12 Economics

Monopoly and Reasons for Its Emergence

Monopoly

Monopoly is the market situation where there is a single firm selling the commodity and there is no close substitute of the commodity sold by the monopolist.

It is very difficult for a firm to enter the monopoly market. Also, a monopolist is free to charge any price for its product. Thus, the seller under the monopoly is said to be the price maker and not the price taker.

 

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The reasons for its emergence

  • Grant of patent rights: When a company/ firm introduces new product or technology, its granted patent rights for its production by the government. This exclusive right is provided by the government in the form of a patent This patent right prevents others to produce the same product or uses the same technology without a license from the same company.

The period for which the patent right is valid is called patent life.

 

  • Licensing by the government: A monopoly market emerges when the government gives the firm the license, i.e. exclusive legal rights to produce a given product or service in a particular area or region.
  • Forming a cartel: Sometimes, individual firms while retaining their identities, unite into a group and coordinate their output and pricing policy in such a way as o reap the benefits of monopoly. Such a formation is called a CARTEL. A cartel is a business combination under which firms coordinate their output and price to reap the benefits of monopoly.

 

You can read more topics on Economics Notes for Class 12

Features of Perfect Competition Market

Determinants of Market

Price Determination Under Perfect Competition

Law of demand

 

For the detailed explanation of Monopoly and its features click on –Economics notes for Class 12 and to read more articles on various topics  of Economics Class 12.

For more Macroeconomics Class 12 and Microeconomics Class 12 CBSE Guide and Online Courses for other subjects, you can login to Takshila Learning and brighten your future by staying connected with us.

 

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