Characteristics of the Monopoly Market

Understanding Monopoly Market . A monopoly market is a form or type of market that has only one power or one seller or one company that controls all of its supplies. In this market no other party can compete with it, so it becomes a pure monopoly or pure monopoly.

Monopoly companies produce products that are not produced by other companies, there are no similar substitutes. Examples of monopoly markets are state-owned companies, oil and natural gas companies and others. From the type of company, what products can be found in the monopoly market.

Characteristics of the Monopoly Market

The monopoly market has characteristics that are very contrary to the characteristics possessed by perfect competition. The characteristics of the monopoly market are as follows:

1) There is only one seller in the monopoly market. The goods or services produced can only be purchased on the monopoly market, not available elsewhere.

2) There are no substitute items for the type of goods produced or sold, similar to non-substitute institutions. The goods produced are the only one and the type of goods cannot be replaced by other items.

3) There are barriers or barriers for new companies that will enter the monopoly market. This obstacle is a strong factor why the monopoly market is formed. Obstacles can be in the form of legality, which is limited by law, technological barriers, namely technology that is used so high that goods are difficult to replicate, or capital constraints, namely the need for large capital in producing similar goods.

4) Monopolistic market players can determine the price of goods according to their wishes. However, this Seller does not affect the price and output of other products offered or offered in the economy.

5) Its monopolistic nature causes the Company not to require promotions or advertisements in marketing its products. There is no alternative item or substitute causes the buyer to be forced to buy the product from the monopolist.

Factors Causing the occurrence of the Monopoly Market.

From the characteristics of the monopoly market can be known the reasons or factors that cause the monopoly. Monopoly arises because there is only one company. This can be caused by goods not being replaced, because of legal obstacles, technological obstacles, the need for very large capital.

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