- Categorie: Microeconomics
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A monopoly can be viewed as the opposite of perfect competition. Instead of many firms, there is only one: the monopolist. This has important consequences for both price setting and the quantity produced.
Barriers to Entry
Why do monopolies arise? There are many different reasons, but all of them have to do with barriers to entry in the market. The reasons for these barriers could be structural. There are properties of the market that automatically shut competitors out: