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

6552 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

What are the trade-offs with other macroeconomic policy objectives of a fall in the unemployment rate?


What is Quantitative Easing and evaluate how it impacts an economy?


What is a key constraint to economic growth and development for developing countries? Explain how so.


What effect would a depreciation of the pound have on the UK economy?


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:

© 2025 by IXL Learning