Why is there no competition in a monopoly?

2 answers:

7 0

In economics monopoly and competition signify certain complex relations among firms in an industry. A monopoly implies an exclusive possession of a market by a supplier of a product or a service for which there is no substitute.

Think of it as an Airline that has an exclusive route from x to y. They can charge whatever they want since there is no other carrier flying that route. Air Canada is famous for that. Let's say three Airlines fly from point x to point y.

Let's also assume that Alaska Airline (or any other of your choosing) has the same route but Alaska Airline is cheaper. Air Canada will undercut these prices at a great loss to get rid of the competition and immediately raises the prices.

jeka57 [31]4 years ago

6 0

There is no competition due to the monopoly is a market structure where there is a single provider of a certain good or service. That means that a single company dominates the entire supply market. In this way, consumers who wish to acquire a good can only go to the monopolist and they must accept the conditions that this imposes. In economics this is the best example of an "imperfect competition".

This answer is based on the article: "Definition of Monopoly" publish by The Economic Times.

You might be interested in

1.If Darla has enough money to purchase 8 cd's per week, how many weeks would it

Andrew [12]

Answer:

72/8=9. 9 is the correct answer

6 0

3 years ago

Which of the following is not a result of following a well-designed budgeting process? Multiple Choice Assurance of future profi

olchik [2.2K]

Answer:

Assurance of future profits

Explanation:

Budgeting refers to estimating a future cost or revenue as on today so as to reduce business uncertainty and achieve planned goals. For example, budgeted costs reveal the estimated costs that would be incurred in the near future.

Budgeting is based upon past figures and current trends so as to estimate the future prospects of an activity under consideration. Such an activity reveals the course of action and aids better planning for the future.

For instance, a cash budget reveals the cash surplus or defict which shall arise in the near future and such a budget draws a firm's attention towards the funds it will require in the near future and from what sources those can be raised.

Since budgeting is an estimate and cannot account for unforeseen business events whose indications did not exist at the time of preparing such budgets, it's results cannot guarantee or assure future profits to a business. It's purpose is to reduce uncertainity, it cannot altogether eliminate uncertainity.