3 What are the necessary conditions for a monopoly position

3. What are the necessary conditions for a monopoly position in the market to be established

Solution

3) There are many characterstics for a monopoly

Single seller-there shpuld be no seller other than one(monopoly)

Following are the condition to hold monopoly

1) Legal practices-Patent and copyright. Govt. Provide exclusive rights by giving the copyright to a monopoly firm

2) when some firm have an exclusive right for a necessary input.

3) Economies of scale: when market conditions are such that it is good or profitable to have one firm whereas if second firms enter then both firms will incur losses. Thus monopoly prevails.