pure monopoly?

Answer 1

Pure monopoly exists when a single firm is the sole producer of a product for which there are no close substitutes. Examples are public utilities and professional sports leagues.

Characteristics
1. A single seller: the firm and industry are synonymous.
2. Unique product: no close substitutes for the firm’s product.
3. The firm is the price maker: the firm has considerable control over the price because it can control the quantity supplied.
4. Entry or exit is blocked.

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Answer 2

Just to set the report vocabulary straight: the terms are "perfect" not "pure" competition and monopoly. Otherwise, the answers above are correct. Some examples of each might enhance your grade: Perfect competition exists in the American market for catfish. No single breeder of catfish can influence the market price. If they charge higher, they sell nothing and if they charge lower than equilibrium, theoretically they take all purchases. Pure monopoly exists in the market for glass crystals. Swarowski is so large, it can control the market price. Competitors cannot enter because the setting up costs are so high, it would take years to get the investment back and Swarowski could undercut anyway. The UK Office of fair Trading defines a brand that has 20% of the market as a monopoly, e.g. nescafe controls around 40% of the instant coffee market, so Nestle is a monopolist. An oligoply exists in markets like alcoholic drinks where Diageo and a few others control most of the world market and basically, they all keep prices around the same to maintain their profits. It also exists in the chocolate bar market with a few, large brand leaders. Monopolistic competition could be said to exist in the market for writing paper and envelopes. Lots of suppliers all clammering for a little extra market share by trying to make their products look different from the competitors'. These markets are being eroded by the large superstores: Tesco, Sainsbury, Asda, etc. because their command of the retail distribution market allows them to devote half of their shelf space to their own-label products and the other half to be shared by branded manufacturers. This distorts availability of the consumers' preferred brands. Good luck with the report.

Answer 3

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