Monopoly
differentiated.
· Monopolistic competition - a market with a large number of sellers and relatively free entry;
each firm "differentiates" its product.
Other Forms of Market Power
· Monopsony - a single buyer of a resource or good.
· Oligopsony - a market characterized by "a few" buyers" of a resource or good.
· Bilateral monopoly - a market where a monopolist sells to a monopsonist.
· Cartel - an organization of sellers who engage in collusion to control output and price.
Monopoly
A monopoly
- single seller
- the good produced and sold has no close substitutes
- barriers to entry prevent others from competing
- in the short, run the firm can alter the price and output; the firm is a "price maker" (or
"price setter")
Barriers to Entry (BTE)
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