What Is Monopoly Market And Its Characteristics? Business Practices That Cause Imperfect Competition

What is a monopoly market (Freepic)

YOGYAKARTA - Monopoly is a term that is familiar in the world of economy and business. However, there are still many who do not know what monopoly and form or action are. Monopoly is one type of competition market that is not perfect. Monopoly occurs when there is a company or business that controls the market, so it has no competitors.

In the monopoly market, producers or sellers have great flexibility to change the situation and condition of the market. Monopolists are called monopolists or single parties who can raise and lower prices as desired. They have no competitors for the company or its products or services. So what is the monopoly and characteristics?

Monopoly is a condition in which a market is controlled by a business or company. This business has the power to attract customers or consumers because it has no competitors. Usually monopolies are carried out by selling products that are widely needed by the community.

Monopoly is a business practice that is prohibited by the provisions of the Law. Based on Law Number 5 of 1999 concerning the prohibition of Monopoly Practices and Unhealthy Business Competition, monopolies are the mastery of production and/marketing of goods and/on the use of certain services by one business actor or one group of business actors.

In the monopoly market, one manufacturer or company can change and determine the price for its products or services. Monopolis does not need to worry about competition because there are no competitors for companies or products or services offered. This action then formed an unbalanced competition market.

The following are the characteristics or characteristics of the monopoly that businesses and the public need to understand:

One of the most easily seen characteristics of the monopoly market practice is that there is only one company or supplier. So one company controls resources to make products or services. This condition makes goods or services unable to be obtained from other places.

Another characteristic of monopolistic practices is that other companies or newcomers have difficulty entering the market. New businesses usually find obstacles when they want to sell their products or services. This condition is because monopolitical companies can determine prices according to their own wishes, and consumers have been formed with no other choice but to buy in that place.

Because there are no other producers or suppliers, consumers also have no other choice in buying goods or services. In the monopoly market, there are no similar substitutes or substitutes. So the products sold can only be found from one company and are not sold by other business people.

Perusahaan yang menjadi pelaku monopoli memiliki kekuatan sebagai price maker. Dengan keleluas pasar dan tidak adanya persaingan, perusahaan monopolis dapat menentukan sendiri harga produk atau jasa yang ditawarkan.

Usually in the monopolistic market, promotion strategies are not needed. Monopolistic companies are the only producers in the market, so consumers will automatically take products or services from them. Because the pool has been formed, advertisements for promotion are no longer needed. Even if there is, advertisements are aimed at maintaining relations with its customers.

That's a review of what a monopoly is in business and its characteristics. Monopolistic practices are carried out by business people or companies with the aim of gaining maximum profit, as well as controlling prices and markets. But monopoly is a forbidden practice or unhealthy business activity.

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