The word monopoly has been derived from the combination of two words i.e., 'Mono' and 'Poly'. Mono refers to a single and "Poly" to seller.

Bilateral Monopoly refers to a Market situation in which a single producer faces a single buyer.

Excess capacity is the difference between the optimum output that can be produced and the actual output produced by the firm.

(i) Pure competition is a narrower term for perfect competition.
(ii) Its features are presence of large number of buyers & sellers; homogeneous products and free entry and exit of the firms.

Market refers to a system of exchange between the buyers and the sellers of a commodity.

Features of Monopoly :
(1) There is a single producer / seller of a product;
(2) The product of a monopolist is unique and has no close substitute;
(3) There is strict barrier for entry of any new firm;
(4) The monopolist is a price-maker;
(5) The monopolist earns maximum profit/ abnormal profit.
(6) Firm and industry: Under monopoly, there is no difference between a firm and industry. As there is only one firm, that single firm constitutes the whole industry

Price discrimination is possible only if the following conditions are fulfilled :
i. The demand must not be transferable from the high priced market to the low priced market.
ii. The monopolist should keep the two markets or different markets separate so that the commodity will not be moving from one market to the other market.

(i) In duopoly there are only two sellers.
(ii) Each seller is fully aware of his rival's motive and actions.
(iii) Both sellers may collude.
(iv) They may enter into cut-throat competition.
(v) There is no product differentiation.
(vi) They fix the price to get maximum profit.

First degree price discrimination:
(i) A monopolist charges the maximum price that a buyer is willing to pay.
(ii) This is perfect price discrimination.
(iii) Consumer's surplus is zero.
Second degree price discrimination:
(i) Price charged is such that a part of consumer's surplus is taken away by the sellers.
(ii) This is called imperfect discriminating monopoly.
(iii) Buyers are divided into groups and a different price is charged for each group. (eg) cinema theaters charge different price for the same film for different class.
Third degree price discrimination
(i) The entire market is split into a few sub markets and different prices are charged in each sub market.
(ii) The division is done based on age, sex, location. (eg) senior citizens pay lower fares in railways.

(i) Buyers and sellers of a commodity or a service. A commodity is bought and sold.
(ii) Price agreeable to buyer and seller.
(iii) Direct exchange and indirect exchange.

Markets on the basis of Time:
Alfred Marshall classifies market on the basis of time. The 'time' here refers to the nature of the factors, such as fixed factors and variable factors, used in the production process, and how the supply of the products meets with varying demand situations in the determination of price of the products.
(i) Very short period market or Market Period: It occurs when with the available time, the quantum supplied of a product cannot be increased (or decreased). Here, the supply curve is vertical; it is inelastic. In this market, the demand force is more active than the supply force in the determination of the price. For example, given an inelastic supply for food, an increase in its demand, during a flood situation, raises the price of food.
(ii) Short period market: It occurs when the quantum supplied of a product can be increased (or decreased) to some extent. Here, the supply curve is a, little more elastic. In this period, some factors continue to be fixed and they work a little more intensively to meet an increased demand.
(iii) Long period market: It occurs when the quantum supplied of a product can be increased (or decreased) to a larger extent. Here the supply curve is very much elastic. Thus, to meet an increase in demand, the quantum of all the factors becomes variable. There are no fixed factors here. Therefore, there is a possibility for larger changes in supply. The price of the product cannot be as high as in the case of short run.
(iv) Very long period market (or a Secular Period Market): It occurs when the entire economy undergoes a drastic change. Newer technologies are introduced and most modem products are produced. Several newer methods of production are adopted in the production process, with improvements taking place in technology. For example, the entry of pen-drive has driven out compact disc (CD); as CD has replaced floppies which once replaced tape cassettes.

(i) Natural Monopoly :
Ownership of the natural raw materials (E.g. Gold mines (Africa), Coal mines, Nickel (Canada) etc.)
(ii) State Monopoly:
Single supplier of some special services (E.g.Railways in India)
(iii) Legal Monopoly :
A monopoly firm can get its monopoly power by getting patent right trade market from the government.

Introduction:
E.H. Chamberlin introduced the concept of monopolistic competition.
(i) Firm under monopolistic competition has equilibrium when MC = MR & when MC cuts MR from below.
(ii) The AR curve slopes downward and is fairly elastic.
(iii) Different firms produce different varieties of the product and sell them at different prices.
Each firm seeks to get equilibrium with regard to
1) price & output 2) product adjustment 3) selling cost adjustment
Short run equilibrium

In fig (a) OM is the equilibrium output. OP is the price.
TR = OMQP, TC = OMRS, Abnormal Profit = PQRS
In fig (b) TR = OMQP, TC = OMLR, Loss = PQLR
Long run equilibrium:

(i) In short run the firm may earn super normal profit or incur loss.
(ii) In the long run the AR is more elastic.
(iii) The firms earn only normal profit.
(iv) Equilibrium output = OM. Price = OP, AR = QM, AC = QM.
(v) Equilibrium is got when AR = AC. AR is tangent to AC at Q.

(i) A monopoly is a one firm industry.
(ii) It has a downward sloping demand or AR curve.
(iii) More units of output are sold at less price.
(iv) MR lies below AR.
(v) The monopolist will continue to sell his product as MR > MC. Equilibrium is when MC = MR.
(vi) Beyond this point the producer has loss.

At OM output MC = MR. Beyond OM he will stop production since MC > MR.
At equilibrium average revenue = QM
Average cost = RM
Profit per unit = RQ
Total profit = PQRS