Pure Monopoly .
A pure monopoly exist when a single firm is the sole producer of a
product , for which there are no other close substitutes available for that
particular product .
Examples of pure monopoly companies are relatively
rare but there are a handful of examples of less pure forms . Government-owned
or government regulated public utilizes such as the water company or the local
telephone company , are all monopolies or virtually so .
Lets take Syabas for example . Syabas provides water supply to the state
of Selangor in Malaysia. Since there are no other companies providing such a
service , it makes Syabas a sole producer of this particular service since
there are no other available substitutes . Other than that , since it’s a sole
producer of this service , Syabas has a considerable control over the price charged
on our water usage , making it a price maker . A pure monopoly like Syabas has
a nonprice competition . It means that the product produced is either
standardized or differentiated . Syabas practices a standardized service . Lastly , Syabas has no immediate competitors
because of certain barriers that keep potential competitors from entering the
industry .
Reference :
Done by :
Nabilla Hamidon 0315833
What's the difference between price maker and price taker? Thanks
ReplyDeletePrice maker are companies that have considerable control on the price their customers pay for goods and services. Whereas price takers are companies that have no control over the price but their prices are dependant on the market :)
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