The Monopoly And Its Structure In The Market

The monopoly and its structure in the market

Introduction

Monopolo refers to a market structure in which there is only one producer that covers demand for a whole market. This type of structure operates in a market in which you have a defined product, is homogeneous and has no close substitutes. For monopoly to exist, it is necessary that the market suffer imperfect competition, that is, there is no product or service that can replace a specific product or service.

Developing

Given this situation is where monopoly is formed. For Rossetti the monopoly can be defined as the opposite end of the perfect competition. The first condition for a typical monopoly case to be configured is the existence of only a company that completely dominates the market. Consequently, the end of the atomized offer, typical of the perfect competition, goes to another: that of the offer concentrated in a single producer. 

Piloña points to monopoly as the market structure in which there is only one type or product class whose supplier is unique. There is, consequently, any competition of supply, or upcoming substitutes. Freire and Blanco obtained by monopoly a market where there is a single company producing a certain good or service, and there is a large number of plaintiffs or buyers, whose sum of their individual demands constitutes the total market demand. 

It is operated in a market with a defined, homogeneous product and with few substitutes, where the principle of independence of the price does not govern.

The monopoly company will set the sale price of the product that allows maximizing its benefits. The company faces the market demand curve, which is decreasing, so it must take into account the influence of the amount produced on the price. Therefore, the monopolist can act on the price or on the amount of product, but not on both variables at the same time. 

conclusion

However, the aforementioned clarifies that the monopoly has a great market power, this is because it is the only company that provides the good or service controlling the price and amount you want to. It is worth mentioning that the monopoly adopts complex forms in the market, this is the reason why there is a series of variations or monopoly classes, for this purpose these classes are explained later in this work.