Simple monopoly

1. Simple monopolySimple monopoly
&discriminating monopoly&discriminating monopoly
Simple monopoly is a market structure in which aSimple monopoly is a market structure in which a
single firm selling a commodity or service by chargingsingle firm selling a commodity or service by charging
a uniform price from all its buyers.a uniform price from all its buyers.
Discrimination monopoly occures when different pricesDiscrimination monopoly occures when different prices
are charged for the same commodity in differentare charged for the same commodity in different
markets.markets.

2. Differences between simpleDifferences between simple
monopoly & discriminatingmonopoly & discriminating
monopolymonopoly
• 1.Under simple monopoly there is same price for the similar product1.Under simple monopoly there is same price for the similar product
in all market.in all market.
• Under discriminating monopoly there is different price for the sameUnder discriminating monopoly there is different price for the same
product.product.
• 2.profit under simple monopoly is less than the profit under2.profit under simple monopoly is less than the profit under
discriminating monopoly.discriminating monopoly.
• 3.under simple monopoly price elasticity of demand is zero .price3.under simple monopoly price elasticity of demand is zero .price
discrimination would be profitable if & only if the price elasticity ofdiscrimination would be profitable if & only if the price elasticity of
demand is different in different market.demand is different in different market.
• 4.under simple monopoly there is no market segmentation.4.under simple monopoly there is no market segmentation.
discriminating monopoly is possible only when the market must bediscriminating monopoly is possible only when the market must be
clearly separable into two or more parts.clearly separable into two or more parts.
• 5.under simple monopoly resale of the product is possible .under5.under simple monopoly resale of the product is possible .under
discriminating monopoly no resale of the product must be possible.discriminating monopoly no resale of the product must be possible.