Forms of Market — Economics STD 12 Commerce / Arts — Question

1. The monopoly power is acquired by a firm due to natural advantages such as good location, control over scarce resources, natural skill, talent, etc.
2. Natural monopoly is determined by the availability of natural resources or natural talents and skills.
3. Normally the monopolist would charge higher prices for the goods.
4. Main objective is to maximise profit.
5. Gulf countries monopolies in production of oil. India’s monopoly in production of jute and cotton. Lata Mangeshkar monopolised as a professional singer once upon a time.

Social Monopoly / Public Monopoly:

1. When government nationalises an industry and acquires complete control over its market that monopoly is called as social monopoly.
2. Social monopoly is determined by economic aims and objectives of the government.
3. Government may not charge higher prices keeping in mind the welfare aspect.
4. The main objective is to provide social welfare.
5. Public utility services like water supply, railway services etc., are examples of public monopoly.