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pure monopoly, imperfect competition?

I know that monopoly is a form of imperfect competition, but is pure monopoly?
My book firstly says that any market that does not simultaneously have the six conditions of perfect competition is imperfectly competitive, so all markets that are not perfectly competitive are examples of imperfect competition.
Later on in the book it says that imperfect competition ranges from duopoly to markets that approximate to perfect competition, eg. capital market/stock exchange.
I would assume pure duopoly is regarded more extreme than normal monopoly, yet there would still be competition.
The main reason i'm not sure is the face that there is no competition in a pure monopoly so technically it cant be imperfectly competitive?
So I would say that it isn't a form of imperfect competition but i'm not sure, due to the first definition in the textbook.
Should I be considering imperfect substitutes as competition for pure monopoly?
(edited 11 years ago)
Reply 1
Reply 2
Original post by Lay-Z
I know that monopoly is a form of imperfect competition, but is pure monopoly?
My book firstly says that any market that does not simultaneously have the six conditions of perfect competition is imperfectly competitive, so all markets that are not perfectly competitive are examples of imperfect competition.
Later on in the book it says that imperfect competition ranges from duopoly to markets that approximate to perfect competition, eg. capital market/stock exchange.
I would assume pure duopoly is regarded more extreme than normal monopoly, yet there would still be competition.
The main reason i'm not sure is the face that there is no competition in a pure monopoly so technically it cant be imperfectly competitive?
So I would say that it isn't a form of imperfect competition but i'm not sure, due to the first definition in the textbook.
Should I be considering imperfect substitutes as competition for pure monopoly?


Duopoly = monopoly power between two firms, hence the 'duo' part of the word
Pure monopoly = one firm has total control over the market due to barriers to entry or other prevention of competition.

Sorry if I haven't answered your question, I couldn't really understand most of what you were asking other than the first few lines, I just woke up and my head isn't working right :smile: If you're sitting the AQA AS Unit1 exam like me tomorrow, good luck!
Reply 3
Original post by JodieW
Duopoly = monopoly power between two firms, hence the 'duo' part of the word
Pure monopoly = one firm has total control over the market due to barriers to entry or other prevention of competition.

Sorry if I haven't answered your question, I couldn't really understand most of what you were asking other than the first few lines, I just woke up and my head isn't working right :smile: If you're sitting the AQA AS Unit1 exam like me tomorrow, good luck!


Thanks for replying first, I'm doing AQA unit 3 I was asking if pure monopoly, not scale of complex monopoly is an example of imperfect competiton, but you probably wont have studied it yet

Posted from TSR Mobile
Pure monopoly is an example of imperfect competition as the monopoly firm will charge monopoly prices, this situation is therefore imperfect competition. Any market structure where firms are price makers, or isnt under perfect competition, can be described as imperfect competition. The only notable exception is if the market is contestable, in which case the monopoly could be described as competitive depending on the degree of contestability (how many of Baumol's assumptions it meets).

Hope this helps,

Rhys
Reply 5
Thats what I was gonna say ^. The pure monopolist will still profit maximise as there are no other producers in the market so it isnt competitive at all, unless for some reason it decided to act competitively (but the reasons for acting competitively usually mean that the monopoly isnt pure).

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