Monopoly

Monopoly

1. Types of monopoly

   • Pure monopoly: 100%
   • Dominant monopoly 40%
   • Legal monopoly 25%
   • Natural monopoly: LRAC is lowest
   • All can be investigated by the CC (competition Commission)

2. Characteristics

   • Can acquire supernormal profits in long run
   • Price Maker: they set the price level in the market
   • Profit maximisation: MC=MR
   • Reduced choice
   • Low dynamic efficiency

3. Examples

   • British Telecom (BT)
   • Post Office
   • Apple
   • Coca Cola
   • Google
   • National Rail

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