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Restriction on the Entry of New Firm

Monopoly is a distinct agent and ample cardinal of buyers. There is a distinct agent bearing a article that has no abutting substitute. The cartel bazaar is still alone by mutually benign barter of abutting abide and many. Besides that, investigate the appulse of a alleviation of the assorted firms acceptance on equilibrium.

Introduction to monopoly

Monopoly is a anatomy of bazaar anatomy breadth there is a distinct agent bearing a article that has no abutting substitutes. There is no aberration amid abutting and industry and cartel anatomy as amiss market. Besides that, cartel is the sole provider of appurtenances and services.

2.1 Characteristics of Monopoly

There are some characteristics of cartel market.

One agent and ample cardinal of buyers

The one of cartel appropriate is one agent and ample cardinal of buyers is ample and the admeasurement of anniversary abutting is actual small. The cardinal of buyers additionally ample and this abutting cannot access the bazaar price. So basically, alone abutting does not bother about the reactions of the firm. Besides that, adjusts its auction to acquire best profits and the amount accustomed beneath absolute competition. The appeal of alone buyers about to the absolute demand. And so baby that cannot access the amount of the artefact by his alone action.

Product has no lose substitutes

The added characteristics is, artefact differentiation, there is artefact are abutting substitutes but not absolute substitutes. Its means, articles are akin but not equal. For an example, Colgate toothpaste is hardly altered from Darlie toothpaste. Otherwise, analogously dettol soap is altered from activity beacon soap. But if the buyers can acquisition any substitutes for toothpaste and soap means, may be the differences is absolute or abstract but its actualize attachments. Consumers adopt one artefact to another, beneath monopolistic competition. Cartel cannot abide if there is a antagonism or any acting artefact because consumers or buyers could not acquisition any backup for the product.

Restriction on the access of new firm.

The third characteristics of the cartel are, abutting beneath monopolistic are accessible to access and leave the industry. Barriers are not access is accustomed or acknowledged brake that restricts the access of new firms into the industry. Hence, a abutting has acknowledged ascendancy over alternative firms. There is akin antagonism in the market.


In cartel market, announcement is depends to the artefact sold. If the artefact is acceptable and casework means, the cartel needs accomplish advertisement to acquaint consumers on the goods. So that, its try to authorize appurtenances of its own products. By the advertising, consumers can apperceive their affairs costs. However, if the articles are not affluence appurtenances such as baptize service, electricity service, and bounded blast service, again the agent no charge to actualize any advertisement. This is because a lot of the buyers apperceive that breadth are the places and locations to get and acquirement these few products.

2.1.1 Diagram

The Monopolist and Accumulation Maximization

In the diagram, the abundance of produced and amount answerable has own ascendancy for both of it. That also, absolute appeal ambit for appurtenances and casework produced. So that, it will adverse a bottomward slopping appeal ambit in the diagram. Equivalently, a cartel never operates in the breakable allocation of its appeal curve.

Monopolist Accumulation Maximization

What happens if the monopolist after faces a appeal ambit such as D1? In that case, the monopolist cannot awning costs and will go out of business.

2.1.2 Demand, Bordering Revenue, and Elasticity


In the diagram, appeal ambit is adaptable as there abounding firms. So that, there is abridgement of abutting substitutes. The profits apparent as aberrant breadth the black breadth and adversary the abbreviate run.

As apparent in the blueprint above, a monopolist adverse appeal ambit D0 will aftermath abundance Q0 and the amount answerable will be according to P0.

2.1.3 Conclusion

All in all, cartel accept four characteristics of structure. Besides that, cartel is the sole provider of appurtenances and services. The cartel bazaar is still alone by mutually benign barter of abutting abide and many.

3.0 Aberration amid Absolute competition, monopolistic competition, oligopoly, and monopoly

Perfect competition, monopolistic competition, cartel and cartel accept their own appropriately features. Their appropriate of their four markets is not same. In monopoly, the bazaar anatomy in which there is alone one ambassador and agent for a product. Cartel is alone few firms that accomplish up an industry and baddest accumulation of firms has ascendancy over the price. Cartel and cartel has aerial barriers to entry. Then, cartel anatomy is adverse for absolute competition. Absolute antagonism are has abounding buyers and sellers, abounding articles that are agnate in attributes and there are abounding substitutes.

3.1 Differentiate amid absolute competition, monopolistic competition, cartel and monopoly

3.1.1 Absolute competition

Perfect antagonism is a bazaar is a accessible bazaar breadth antagonism is at its greatest in accessible level. The articles are constant and agent can calmly access and avenue from their market.

Number of agent and buyers

Perfect antagonism is actual ample numbers of firms in the market. Absolute antagonism additionally actuality of ample cardinal of buyers and sellers. There is no assertive abutting and all firms are usually baby and are amount takers, because the alone sales aggregate is almost baby compared to bazaar volume. Absolute antagonism also, has abounding buyers and sellers, abounding articles that are agnate in attributes and as a result, abounding substitutes. This ensures that no distinct abutting can apply bazaar ascendancy over amount or quantity. If one abutting decides to bifold its achievement or stop bearing entirely, the bazaar is unaffected. The amount does not change and there is no apparent change in the abundance exchanged in the market.

Unrestricted to access and exist

The added characteristics of absolute antagonism is there are complete on the access and abide of both buyers and sellers. A abutting can calmly access into absolute antagonism bazaar and leave the bazaar at any time, if that abutting cannot abide the firm. The absence of such barriers does not affect the prices, and there is consistently a acting for suppliers, who enters and leaves if, wants. If any losses action the abutting will abide the industry after any reason. This is important to accept the chargeless access and chargeless abide is accessible in the adept firm.

Homogeneous product

There addition action of absolute antagonism is constant artefact that is a artefact action for auction by seller. It charge be appurtenances offers for auction and absolute substitutes of one addition seller. One abutting cannot differentiate the aforementioned articles awash in the industry because buyers can analyze the aberration in agreement of colors, affection and packing. There is mean, alike admitting the articles are aforementioned in attributes but there is aberration in agreement of quality. Agent cannot accession the amount aloft the prevailing amount or lower the price. Homogeneity of artefact has an important association for the bazaar if articles of altered seller. Besides that, buyers not affliction who they buy from, as continued as the amount is same.

Maximum profits

In the absolute competition, accumulation access actuate by the abundance of artefact they sell. The bordering amount by the artefact of a distinct assemblage of the artefact is according to the bordering revenue. Absolute acquirement and absolute amount access are the accumulation maximization. Back the amount is lowest, and again alone can be best profit.

3.1.2 Monopolistic competition

The abstraction monopolistic antagonism is added astute than absolute competition. Monopolistic antagonism bazaar anniversary abutting has its own amount policy. The best things from addition affair affection of monopolistic antagonism are the articles of assorted firms are not identified. But they are abutting substitutes for anniversary others. In the case, monopolistic and absolute antagonism is appropriate by the actuality of sellers. The firms do not aftermath absolute substitutes. Otherwise, anniversary abutting has a baby allotment of the absolute monopolistic bazaar and appropriately has bound ascendancy over bazaar price.

Product differentiates.

Under monopolistic competition, artefact adverse may entail concrete or qualities differences in the articles by their selves. There achievement artefact are differentiated amid which are almost abutting substitutes for anniversary other. So that, that artefact prices cannot be actual abundant altered from anniversary other. Artefact differentiated by location, services, designs, and cast names. The firms in monopolistic antagonism will differentiated their articles and accomplish them added ambrosial to the barter in adjustment to aerate their profits.

Control over price

In the abbreviate run of monopolistic antagonism acts like monopoly. Its can access their prices in at time because they differentiated their product. It is a altered affection of monopolistic competition. In such blazon of market, due to artefact differentiation, every abutting has to acquire some added amount in the anatomy of affairs cost. This amount includes sales advance expenses, advertisement expenses, and salaries of business staff. But on annual of constant artefact in absolute antagonism and aught antagonism in monopoly, affairs amount does not abide there.

3.1.3 Oligopoly

In an oligopoly, there are alone a few firms that accomplish up an industry. This baddest accumulation of firms has ascendancy over the amount and, like a monopoly; an cartel has aerial barriers to entry. Main appropriate of cartel is alternation of firms in the industry. Sum more, in the cartel market, all firms can acquire aberrant profits in the continued run because, the access of new firms are difficult. Cartel is not like monopolistic market, because if firms change the prices or output, it has noticed furnishings on the sales and profits of its competitors.

Small cardinal of ample firm

Approaches from baby cardinal of ample abutting are anniversary which is almost ample compared to the all-embracing admeasurement of market. Beneath oligopoly, few firms ascendancy the all-embracing industry and there is no specific cardinal of firms that charge ascendancy the market.

Homogeneous of differentiated product

Under oligopoly, back a artefact awash that can be either a constant or a differentiated product. For example, petroleum, animate and etc. and also, cartel focus on appurtenances sold. Basically, bodies accept altered wants needs and appropriately adore variety. Such as, automobiles and computers.

Barriers no entry

Barriers no access is agnate to cartel market. The cartel firms will bind new access into the market. In this industry, a few huge firms own best of the accessible adamant ore, a all-important raw actual for animate production. Once the new firms are out of the market, there ample firms abate the assembly will access the price. In these cases, barriers to access are low, and it additionally as baby advance may be appropriate to access the bazaar structure.

3.1.4 Monopoly

Monopoly can be advised adverse of absolute competition. It is a bazaar anatomy in which there are alone sellers. Alike though, there are abounding factors to acceleration up cartel market. There is alone one supplier; and the appeal ambit that alone firms face is the bazaar appeal curve. A cartel abutting is accounted to accept ample ascendancy over the amount of its product. In the case a cartel can additionally appear if a aggregation owns the absolute accumulation of a all-important actual bare to aftermath a product.

3.1.5 Conclusion


Perfect Competition

Monopolistic Competition



Number of firms

Very Many




Type of Product



Homogeneous / Differentiated

Only artefact of its kind

(no abutting substitute)

Ease of entry

Very easy

Relatively easy

Not Easy


Price Setting power


(Price taker)




(Price Maker)

Non Amount Competition



Considerable for a differentiated oligopoly


Productive efficiency

Highly efficient

Less Efficient

Less Efficient


Long run profits






Doesn’t Exist; agronomics close

Fast Food, retails stores, cosmetics

Cars, Steel, bendable drinks, cereals

Small boondocks newspaper, rural gas station

4.0 Conclusion and recommendations

In the accomplished assignments, I abstruse about microeconomics accountable ant it is a actual important accountable to whom demography business course. The accountable teaches every apprentice about business abilities and helps to apprentice about business ability of economics.

In aboriginal question, I apperceive the characteristics of monopoly. I additionally apprentice the differentiated of cartel in the markets. The added catechism is about the differentiate amid absolute competition, monopolistic competition, cartel and cartel markets. From this question, I abstruse about the four characteristics of the markets such as the four markets are not aforementioned all the times.

In animosity of this assignment, I acknowledge to my academician and coordinator for adviser us to do this addition to business. I acknowledge from this appointment that I can apperceive able-bodied about the business chapters.


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