Irving Fisher described monopolies as market structures where there is no competition. To neoclassical economists, a monopoly is the exact opposite to perfect competition. And an even simpler definition would be that a monopoly is just a market where there is only one seller. However, monopolies must be well understood, in order to understand why they are so harmful. In this Learning Path we’ll learn about monopolies, starting with a few basic definitions and starting to learn about a few types of monopolies.
Basic definitions:
Monopoly, the polar opposite to perfect competition;
Surplus, diminished for consumers, increased for the firm;
Lerner index, a good way to measure market power.
Types of monopolies:
Monopsony, not some kind of monopoly, but its opposite;
Bilateral monopoly, when a monopoly and monopsony meet;
Multiproduct monopoly, when monopolies produce multiple goods;
Multiplant monopoly, when monopolies produce in multiple plants.
