MARKETING, ACTIVELYSHARE.COM — Monopoly market is a form of market that is controlled by one seller. In this market, sellers have unique and one-of-a-kind products, which cannot be found in other sellers. Therefore, the buyer has no other choice but to buy from the seller.
The seller in this monopoly market can determine the price of the product. In fact, sellers in this monopoly market do not need promotion to offer their products. Promotions are carried out solely to maintain good relations with customers.
A monopoly market is an example of an imperfect competition market, namely a market consisting of a few sellers and many buyers. Examples of imperfectly competitive markets are monopoly markets, monopolistic competition markets, and oligopoly markets.
Before understanding what a monopoly market is, you need to first identify an imperfect competitive market. The reason is, a monopoly market is a market that belongs to this type of imperfect competition.
Imperfect competition market is a market that consists of few sellers and many buyers. In this market, the seller can determine the price of the goods.
The types of goods traded are heterogeneous (various types of goods). Examples of imperfectly competitive markets are, monopoly markets, monopolistic competition markets, and oligopoly markets.
Monopoly market is a market that occurs when the entire supply of goods in the market is controlled by one seller or a certain number of sellers.
Monopolistic Competition Market
A monopolistically competitive market is a market with many sellers who produce different types of goods. This market is often found in the service sector and retail trade. For example, salon services, transportation, drug stores / pharmacies, and grocery stores.
Oligopoly market is a market that consists of only a few sellers for a particular good. So that between one seller to another can affect the price.
For example, companies selling cars and motorcycles, cigarette companies, telecommunications industry, and cement companies.
Monopoly Market is
Monopoly is a situation in which the pawnshop of certain merchandise (in the local or national market) is at least one third controlled by one person or group so that the price can be controlled. Monopoly is also defined as the sole right to do business (make and so on).
So, a monopoly market is a form of market in which there is only one seller who controls the market. The price maker in a monopoly market is a seller or often referred to as a “monopolist”.
Monopoly market is a term that comes from the Greek “monos” and “polein” which mono means “one” and polein means “seller”.
Theory. In terminology, a monopoly market is a place of buying and selling in which there is only one seller or producer of a monopoly or a monopolist.
As a price maker, a monopolist can increase or decrease prices by determining the number of goods to be produced. The less goods are produced, the more expensive the goods are, and vice versa.
However, the seller also has a limitation in pricing. If the pricing is too high, people will delay buying or try to find or make substitutes for the product or even look for it on the black market.
Monopoly Market Characteristics
After understanding what a monopoly market is, you need to recognize its characteristics in order to understand better. The characteristics of a monopoly market are as follows:
1. There is one seller or manufacturer.
2. Buyers can only play the role of buyers of products available by one manufacturer.
3. The seller or producer has full power to determine the selling price (price setter or price maker).
4. The monopoly seller or producer controls the production and the amount of product produced.
5. Products produced by monopoly producers are always unique because they cannot be produced by producers from other companies.
6. There are always obstacles for new sellers or producers in the form of legality regulated by law, availability of advanced technology, and large capital that is difficult to own.
7. It does not require much promotion for the sole seller or producer of a monopoly, because all buyers in a monopoly market must buy it and have no other choice.
8. Promotions or advertisements carried out by sellers in monopoly markets are not for the purpose of attracting customers but merely to maintain good relations with buyers or consumers.
9. There is a right to restrict new entrants or producers to the sole seller in the monopoly market.
10. Buyers in a monopoly market cannot do much in determining the conditions for buying and selling activities in a monopoly market to the sole seller.
Those are some of the characteristics of a monopoly market that you need to know. You need to recognize the monopoly market as one of the types of markets that exist.