Syllabus T. Y. B. A. Paper : IV advanced economic theory with effect from academic year 2010-11 in idol

3. Unique Commodity: The commodity sold by the monopolist is 
a unique product, which has no close substitutes in the market. In 
other words, cross elasticity between the monopolist's product and 
the product of other firms is zero. The consumer will have to buy 
the commodity from the monopolist or go without the commodity. 
 
4. Price-maker: Since the monopolist is the only seller in the 
market he fixes the price and can also charge different prices for 
different consumers. He is the price maker as he has complete 
control over the market supply. 
 
5. Profit Maximization: The main aim of the monopolist is to 
maximize his profits. So, the monopolist may charge uniform price 
to all consumers or may charge different prices to different 
consumers. That is, price discrimination is possible in a monopoly 
market. The monopoly firm aims at earning supernormal profits. 
 
6. Restricted entry: No other seller can enter the market, as the 
market would no longer be a monopoly market. That is, there are 
strong barriers to the entry of new firms and only one firm 
exercises sole control over the production of a commodity. 

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7. No rivals: The monopolist does not face any rivalry from 
competitors. 
8. Downward sloping demand curve: The demand curve faced 
by a monopolist is downward sloping (Fig. 4.1). It indicates that 
the volume of sales can be increased only if prices are lowered. 
 
 
Quantity 
 
Figure 4.1 
 
9. Fixes either the price or output to be sold: The monopolist 
likes to fix a high price and sell maximum output in order to 
maximize his profits. However, he can either fix the price or the 
output to be sold, but not both. If he fixes the price, the output to 
be sold is to be decided by the consumers or buyers and if he 
decides to sell more output, then he has to lower the price.