What are the characteristics of a monopolistic market?

A monopololistic market exists when there exists only one supplier of a good or service, but there are many consumers. Some key characteristics of a monopolistic market are price maker, high barriers to entry and product differentiation. In a monopolistic market, the monopoly has full control of the market since there is no other competitors. The monopoly can thus set its price and quantity supply based on its Marginal Revenue and Marginal Cost, i.e produce at where MR=MC for profit maximization. Furthermore, since monopoly can gain supernormal profit from selling their goods/serivce. They will have the ability to invest in research and development in order to differtiate their product and block potential competitors join the market.

ZX
Answered by Zhen X. Economics tutor

6780 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

What is the difference between the RPI and CPI rate of inflation


Why do we study microeconomics?


Evaluate relative merits of monetary and fiscal policy measures for governments wanting reduced unemployment in the UK. (20 marks)


Evaluate government policies that could be used to reduce income inequality and wealth inequality in a developed country of your choice. 25 marks


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning