Monopoly Revolution Game

Product Information

The absence of substitutes makes the demand for that good relatively inelastic, enabling monopolies to extract positive profits. A monopoly can preserve excess profits because barriers to entry prevent competitors from entering the market. Monopolies may be naturally occurring due to limited competition because the industry is resource intensive and requires substantial costs to operate (e. If there is a single seller in a certain market and there are no close substitutes for the product, then the market structure is that of a "pure monopoly". There are four basic types of market structures in traditional economic analysis: perfect competition, monopolistic competition, oligopoly and monopoly.

And if the long-term average cost of the dominant company is constantly decreasing [ clarification needed], then that company will continue to have the least cost method to provide a good or service.Sometimes, there are many sellers in an industry or there exist many close substitutes for the goods being produced, but nevertheless, companies retain some market power. Intellectual property rights, including patents and copyrights, give a monopolist exclusive control of the production and selling of certain goods.

The most significant distinction between a PC company and a monopoly is that the monopoly has a downward-sloping demand curve rather than the "perceived" perfectly elastic curve of the PC company. The boundaries of what constitutes a market and what does not are relevant distinctions to make in economic analysis. While monopoly and perfect competition mark the extremes of market structures [16] there is some similarity.Barriers to entry: Barriers to entry are factors and circumstances that prevent entry into market by would-be competitors and limit new companies from operating and expanding within the market.

Network externalities: The use of a product by a person can affect the value of that product to other people. Barriers to exit are market conditions that make it difficult or expensive for a company to end its involvement with a market. Manipulation: A company wanting to monopolise a market may engage in various types of deliberate action to exclude competitors or eliminate competition.Barriers to entry: Competition within the market will determine the firm's future profits, and future profits will determine the entry and exit barriers to the market.