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.

Answered by Zhen X. Economics tutor

5791 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

[Edexcel Economics A 2015] With reference to the information provided, examine two pricing strategies an oligopolist like Sony may use to maximise profits (8).


Should maximising profits be the main objective of a business?


What is price elastic demand?


'Is Globalisation beneficial for all parties?'


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2024

Terms & Conditions|Privacy Policy