Monopoly.pdf - Lecture 12 Market Structure Monopoly...

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Lecture 12 Market Structure - Monopoly
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Imperfect Competition and Market Power: Core Concepts An imperfectly competitive industry is an industry in which single firms have some control over the price of their output. Firms in imperfect competition or imperfectly competitive firm has the ability to raise price without losing all demand for its product. They have ‘ market power ’, unlike perfectly competitive firms.
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What is a Monopoly? A market structure of which a single firm producing a particular good and service Hence, the demand curve for its product is identical to the market demand curve Good produced is not homogeneous but unique in nature (no close substitutes) Price maker i.e. ability to set price to influence demand to reap supernormal profits Set barriers to entry to prevent new entrants into the market Ability to price discriminate Example: TNB (National Electricity Board), KTM (Malayan Railway), Telekom Malaysia
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