Monopoly for Its Emergence Notes For Class 12 Economics
Monopoly and Reasons for Its Emergence
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.
Watch and learn CBSE Class 12 Economics classes with online classes for Economics offered by Takshila Learning.
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
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.
Follow us on a Social media