Features of Monopoly Market

The main features of a monopoly market are as follows:

• Existence of Single Firm. By definition monopoly means a single firm producing or selling in the market. The single seller, facing no competition from others, thus can decide about his price or output policy.
• Absence of Close Substitutes. Existence of close substitutes introduces an elemaent of competition in the market and thus dilutes the control of the single firm monopoly. Absence of close substitutes means that everyone has to buy the same product that the monopoly firm produces. Thus, the monopolist has a greater control over market.
• Existence of Barriers to Entry of New Firms. For the single firm to continue as a monopolist, it is necessary that no other firms enter the market for producing the same good. This is possible only when there are barriers to the entry of new firms. Such barriers could be legal barriers in the form of grant of patent, copyright, trademark, etc.