MONOPOLY??
Monopoly is a form of market structure in which a single seller or firm has control over the entire market supply, as there are no close substitutes for his products and there are barriers to the entry of rival producers. This sole seller in the market is called “MONOPOLIST”
MONOPOLY
FEATURES:-
Single Firm
No Substitute
Anti-thesis of Competition
Price Maker
Downward Sloping Curve
Entry Barriers
What makes a monopoly ?
Natural sources
Exclusive possession of technical knowledge
Exclusive ownership of raw material
Legal sources
business reputation
Business combines
Economies of large scale
Profit Maximization
The monopolist like the competitive firm will
maximize profits where Total Revenue minus Total Cost is maximum.
Increases output as long as MC are lower than MR, or he will maximize profits at the output level where MC=MR.
Pros:--
Worker may benefit
Growth of r&d
Innovation
Economies of scale
Risk spreading
Availability of finance
Incentives
Contribution to public revenue
Concluding remarks
Cons:--
Consumers may pay higher prices due to lack of competition
Consumers may have less choice.
Firms may not be very efficient with their resources as there is no need to reduce costs.
Less innovation (new products).
CASE STUDIES
De beers’
de beers ,a south african mining group has established a central selling organisation which controls more than 80 % of the diamond business in the world.
Cos. Monthly pricing stratergy implies continuous rise in the value of diamonds with its management of control over market supply.
Co. supplements its supply control with demand manipulatipon to maintain a high level of diamond prices.
Exclusive ownership of raw materials
Extent to which a co. can go when it it has an advantage of owning raw materials,
Purchase of surplus gems to hoard them
Control over its mine operation and output
Negotiation with Countries like Russia when they try to dump there products in market.
Reliance Energy Ltd is India's leading integrated power utility company in the private sector. It has a significant presence in generation, transmission and distribution of power in Maharashtra, Goa and Andhra Pradesh.
REL is committed to creating superior value for all its stakeholders and be amongst the most admired and trusted utility companies in the world by setting new benchmarks in standards of corporate governance, operational and financial excellence, responsible corporate citizenship and profitable growth.
Areas covered in mumbai
North zone ,borivali to bhayander
Central zone , goregaon to kandivali
South zone , bandra to vile parle
East zone , chunabhatti to vikroli
Why monopoly ?
No SUBSTITUTE
Pidilite the parent company of fevicol is uniquely positioned in the INR 5.5 bn Indian furniture glues market.
Fevicol has a 63% market share and enjoys a near-monopoly status.
The market is too small to interest big players and tough for the smaller players to compete with Pidilite in terms of quality and marketing capabilities.
Business combines
Monopoly of fevicol can not be attributed to one or two factors, it is the combination of various qualities that makes fevicol a monopolist in its market
Factors attributed are :
Quality
Advertising
Pricing
Goodwill
Bird flu antidote monopoly
In a recent meeting of regional health ministers, Dr. Francisco Duque III, Philippines Department of Health, accused Roche of "monopolizing" the production and distribution of the drug known as Oseltavimir (brand name Tamiflu).
Oseltavimir is considered to be the primary antiviral drug used to combat bird flu. Roche is the only drug company authorized to manufacture the drug.
With only first world countries able to get the drug supplies, request is being made to roche to give up there patents so that other co. can make similar drug and supply them to other poor nations where there is an actual problem.
The Market for Drugs
Indian Railways
The premier transport organisation of the country is the largest rail network in Asia and the world’s second largest under one management . It has about 63000 route kms of track
Indian Railways runs around 11,000 trains everyday, of which 7,000 are passenger trains. Indian railways carry around 13 million passengers every day and over 1.4 million tonnes of freight every day. Its capacity is around 475 million tonnes a year.
Railways are a faster and cheaper mode of transport men and materials. The substitutes available are expensive therefore it is a major mode of transport for long distances within the country.
Monopoly is a form of market structure in which a single seller or firm has control over the entire market supply, as there are no close substitutes for his products and there are barriers to the entry of rival producers. This sole seller in the market is called “MONOPOLIST”
MONOPOLY
FEATURES:-
Single Firm
No Substitute
Anti-thesis of Competition
Price Maker
Downward Sloping Curve
Entry Barriers
What makes a monopoly ?
Natural sources
Exclusive possession of technical knowledge
Exclusive ownership of raw material
Legal sources
business reputation
Business combines
Economies of large scale
Profit Maximization
The monopolist like the competitive firm will
maximize profits where Total Revenue minus Total Cost is maximum.
Increases output as long as MC are lower than MR, or he will maximize profits at the output level where MC=MR.
Pros:--
Worker may benefit
Growth of r&d
Innovation
Economies of scale
Risk spreading
Availability of finance
Incentives
Contribution to public revenue
Concluding remarks
Cons:--
Consumers may pay higher prices due to lack of competition
Consumers may have less choice.
Firms may not be very efficient with their resources as there is no need to reduce costs.
Less innovation (new products).
CASE STUDIES
De beers’
de beers ,a south african mining group has established a central selling organisation which controls more than 80 % of the diamond business in the world.
Cos. Monthly pricing stratergy implies continuous rise in the value of diamonds with its management of control over market supply.
Co. supplements its supply control with demand manipulatipon to maintain a high level of diamond prices.
Exclusive ownership of raw materials
Extent to which a co. can go when it it has an advantage of owning raw materials,
Purchase of surplus gems to hoard them
Control over its mine operation and output
Negotiation with Countries like Russia when they try to dump there products in market.
Reliance Energy Ltd is India's leading integrated power utility company in the private sector. It has a significant presence in generation, transmission and distribution of power in Maharashtra, Goa and Andhra Pradesh.
REL is committed to creating superior value for all its stakeholders and be amongst the most admired and trusted utility companies in the world by setting new benchmarks in standards of corporate governance, operational and financial excellence, responsible corporate citizenship and profitable growth.
Areas covered in mumbai
North zone ,borivali to bhayander
Central zone , goregaon to kandivali
South zone , bandra to vile parle
East zone , chunabhatti to vikroli
Why monopoly ?
No SUBSTITUTE
Pidilite the parent company of fevicol is uniquely positioned in the INR 5.5 bn Indian furniture glues market.
Fevicol has a 63% market share and enjoys a near-monopoly status.
The market is too small to interest big players and tough for the smaller players to compete with Pidilite in terms of quality and marketing capabilities.
Business combines
Monopoly of fevicol can not be attributed to one or two factors, it is the combination of various qualities that makes fevicol a monopolist in its market
Factors attributed are :
Quality
Advertising
Pricing
Goodwill
Bird flu antidote monopoly
In a recent meeting of regional health ministers, Dr. Francisco Duque III, Philippines Department of Health, accused Roche of "monopolizing" the production and distribution of the drug known as Oseltavimir (brand name Tamiflu).
Oseltavimir is considered to be the primary antiviral drug used to combat bird flu. Roche is the only drug company authorized to manufacture the drug.
With only first world countries able to get the drug supplies, request is being made to roche to give up there patents so that other co. can make similar drug and supply them to other poor nations where there is an actual problem.
The Market for Drugs
Indian Railways
The premier transport organisation of the country is the largest rail network in Asia and the world’s second largest under one management . It has about 63000 route kms of track
Indian Railways runs around 11,000 trains everyday, of which 7,000 are passenger trains. Indian railways carry around 13 million passengers every day and over 1.4 million tonnes of freight every day. Its capacity is around 475 million tonnes a year.
Railways are a faster and cheaper mode of transport men and materials. The substitutes available are expensive therefore it is a major mode of transport for long distances within the country.