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 Form 3 Business Studies lessons on product markets

Meaning and main features of a Monopoly market

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Answer Text:
-Is a type of product market where there is only one producer of a commodity that has no close substitute. E.g Kenya power offering electricity in Kenya.
Features of monopoly:
-The market has only one producer
-The entry into the market is difficult due to the barriers.
-Products sold are identical
-Firm can either fix price or output but not both
-Firm earns super-normal profits in the long-run
-Firm engages in huge promotional activities in order to keep away potential competitors and expand and maintain existing market