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EQUILIBRIUM, PRICE
DISCRIMINATION, AND
CONTROL MECHANISM
FEATURES OF MONOPOLY
1. Single seller and large no. of
buyers.
2. No close substitutes.
3. Closed entry
4. Price maker
5. Price discrimination
KINDS OF MONOPOLY
1. Public and private monopoly
2. Simple and discriminating
monopoly
3. Natural and artificial monopoly
4. Technological monopoly
5. Fiscal and legal monopoly
MONOPOLY EQUILIBRIUM
C/R
MC
B
A
O
OUTPUT
MR
Q
AC
AR
Price
Discrimination
Monopoly
Monopoly
Monopoly
PRICE DISCRIMINATION
R/C
P1
P2
MC
E MR
O
OUTPUT
AR1
AC
AR
EXPLANATION OF THE
DIAGRAM
In the diagram AC, MC, AR, MR
Monopoly
Raising
If
Monopoly
12
Enhances
economic inefficiency
Monopoly
Because
13
Demand
Price
Monopoly
14
MONOPOLY
CONTROL
POLICIES FOR REGULATING MONOPOLY
Governments Regulatory
Influence on Business
Reasons for
Controls Regulation
natural monopolies
Controls negative externalities
Achieves social goals
Other reasons
Controls excess profits
Controls excessive protection and
Controls unethical behaviour.
Benefits of Regulation
Fair treatment of
employees
Safer working conditions
Safer products
Cleaner air and water
small business
THE
COMPETITION ACT,
2002
The Competition
(Amendment) Act, 2007
BROAD AIMS OF
COMPETITION ACT,2002
An Act to provide, keeping in view of the economic
compartments:
1. Anti - Competitive Agreements[Section 5]
2. Abuse of a Dominant position[Section 6]
3. Combinations Regulation[Section 7]
4. Competition Advocacy [Section 8]
5. Enforcement [Section 9]