If you want to understand the difference between Monopoly and Monoprice, then read this article. In this article I will explain what a monopoly is and Monoprice is not. Both words sound alike but are very different when applied to the board game.
A monopoly is a situation where there are only one seller and no other buyers. So it is said that monopoly is an invitation to compete. Monopoly is a board game where the players take turns controlling the property. So for a monopoly to exist there must be plenty of competitors and the monopoly prices must be controlled by the sellers. Monopolistic is not the same as competitive, in fact it destroys the possibility of any competitors because a monopoly is based on monopoly prices.
So what is the main difference between monopoly and monopoly that may help us to determine if they are similar or not? The main difference between monopoly and monopoly is the existence of a ceiling price. In a monopoly the prices are set and cannot be changed unless the government or someone decides to reduce them. They can’t increase prices because then the sellers cannot make any profit from the transaction.
So that pretty much explains what monopoly is, it’s a situation where there is a single seller and every buyer has to pay the complete price. That price doesn’t change unless the government or some third party changes it. On the other hand in a competitive marketplace, there is plenty of competition and the prices can increase because sellers can increase their profits by reducing the prices or increasing their supply.
So we already know what a monopoly is, but what about the problem of monopoly prices? The problem is that it causes monopoly competition, meaning that there are only a limited number of sellers and the prices are set artificially high, so that sellers cannot make any profit. It also causes the price to drop below its true market level, so that sellers are forced to sell at reduced prices to get rid of stock. They do this because they think there won’t be any buyers but naturally there will be as there are only sellers of that product in the market.
The solution to this problem is not obvious. You would probably need to lower the price to make any profit from your business. However, if you raise the price too much, you’ll also decrease your number of buyers and you will incur losses in excess. So if you go for a modest price increase, you will increase your sales. But if you go for a major price increase, then you’ll decrease your sales and you’ll incur losses.
On the other hand, a monopolistic situation is a situation where no seller can gain from his activity. For example, if there are only two producers in a town and one decides to start production. Then there is no chance for the other producer to gain customers. In such a situation there is no need for him to increase the price since no customers will come in. He simply has to cut down production and sell his goods at a lower price than the rest.
This type of situation is commonly referred to as a competitive monopoly, which occurs when the producers do not have any or little competition. This does not mean that there is no buyer because each buyer competes with each other to buy their goods and therefore the prices do not change. The difference between monopolistic and competitive pricing is that in a competitive setting, the producers do not set prices that are out of reach of the competitors. Monopoly prices are based on the cost of production and the level of competition.
