Financing and Marketing Management

Unit 10 - Market Structure and Types

10.3. Pure monopoly
In economics, an industry with a single firm that produce a product, for which there are no close substitutes and in which significant barriers to entry prevent other firms from entering the industry to compete for profit is called pure monopoly. Example: When the ‘City Cell’ mobile service company first started their business in Bangladesh, they were the only mobile service provider then. Before the ‘Grameen Phone’ came into the market, they enjoyed pure monopoly.
There are two types of pure monopoly:

• Regulated monopoly
• Nonregulated monopoly

Regulated monopoly: The government permits the company to set rates that will yield a “fair return”. Example: Power Company.
Nonregulated monopoly: Company is free to price at what the market will bear. Example: ‘City Cell’
(When it first introduced mobile service in Bangladesh).