About the Monopoly // Economy

Greetings partner continuing in the cycle of Economics, for this opportunity the type of market which is very overwhelming such as Monopoly, it can be just one person or only one company has enough control over a particular good and service, so to speak. In this way, to determine in a way what it means, establishes the conditions who can access these goods and services, to the point of controlling the price, it should be noted that the entry barriers are mainly legal, technological or related to natural resources, That is why there is evidence of a single seller, single supplier, because there is this type of market structure, whether natural, patents, government licenses, the lack of substitute products. Monopolies are thus characterized by the lack of economic competition of goods and services, that is why in the monopoly a greater market share is obtained than is expected in perfect competition, it is said that it is coercive when the monopoly company actively prohibits the entry of competitors limit them.

Let's analyze the following, dear reader, the power of the monopoly has a limit, this is the demand, whatever the price you want to put, you can only sell what people are willing to buy at that price, monopolies derive their power over the market of barriers to the entry of new competitors, since the circumstances that prevent the entry of competitors in the market, the types that can occur of entry barriers can be economic, legal and deliberate, they only try to maximize their economic benefit is very different from the The condition for the optimal choice is the same as in the case of perfect competition, this means that the marginal revenue must be equal to the marginal cost (MI = CM), in the monopoly it is centered on whose sum of its individual demands constitute the total market demand, where its mechanism operates in a market with a defined, homogeneous product and with few substitutes, in the technology industry it usually happens r this market structure, in the drug industry as well, it must be clear that this type of market is not perfect in its class, the best opportunist in the weak of its possible competitor in the market, because such conditions are also a maximizing monopolist profit will set marginal cost equal to marginal revenue and sell a lower cost, so to speak.

We are clear that whoever dominates information and technology with a willingness to change can dominate a market and see how it establishes its condition to have advantages over others, either in banking, a market, a seller should have knowledge about different market structures to better understand an economy, as part of our life in a society.