top of page

Economics explained


Market structures



The secret to scoring awesome grades in economics is to have corresponding awesome notes.
A common pitfall for students is to lose themselves in a sea of notes: personal notes, teacher notes, online notes textbooks, etc... This happens when one has too many sources to revise from! Why not solve this problem by having one reliable source of notes? This is where we can help.
What makes TooLazyToStudy notes different?
Our notes:
  • are clear and concise and relevant
  • is set in an engaging template to facilitate memorisation
  • cover all the important topics in the O level, AS level and A level syllabus
  • are editable, feel free to make additions or to rephrase sentences in your own words!

    Looking for live explanations of these notes? Enrol now for FREE tuition!

A monopoly describes the situation where a market has only one producer.

In theory, a monopoly has the following characteristics:

a single seller

no close substitutes

high barriers to entry

the monopolist is a price maker.

If left uncontrolled, a monopoly can set its own price in the marketplace, which can result in what economists refer to as 'super-normal profits'. For this reason, monopolies are usually subject to control by government or a government agency.

Natural monopoly

A natural monopoly is a market situation where a monopolist has overwhelming cost advantage. In theory this can come about where a monopoly has sole ownership of a resource or where past ownership of capital resources

A monopoly exists when there is only one firm in the industry

In an industry with only one monopoly firm rather than lots of small competitive firms (perfect competition), three socially harmful things occur:

The monopoly firm produces less output than firms in a competitive industry.

The monopoly firm sells its output at a higher price than if the industry was competitive.

The monopoly firm’s output is produced less efficiently and at a higher cost than the output produced by firms in a competitive industry

👉‍Disadvantage to consumers

Higher prices

Firms with monopoly power can set higher prices than in a competitive market. Monopolists are also able to use price discrimination. This is the practice of charging different prices to different customers for essentially the same product.

Less choice

Abuse of monopoly power could also involve setting higher prices or limiting output and lead to less choice for consumers.

Disadvantage to other producers

Artificial barriers

A monopoly can also set artificial barriers to prevent other producers from entering the market. For example, it can limit production and access to technical developments. There may also be an unfair treatment of competitors.

Preferential treatment

The firm may give preferential treatment to certain parties, placing others at a disadvantage. This does not benefit other producers.

bottom of page