Monopolies

Question 1

What is a Monopoly?

Answer 1

• 25% of the market share or more
• Pure monopoly: only one firm in the market
• Can act as price maker and makes supernormal profits

Question 2

Monopsony

Answer 2

• Single buyer dominates the market
• Act as price maker.
• Can lead to exploitation.

Question 3

Natural Monopoly

Answer 3

• When there is only room in a market for one firm

- wHEN A FIRM HAS COMPLETE CONTROL OF A NATURAL RESOURCE.