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    Monopoly of Indian Railway

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    Nawnit Kumar
    This document discusses monopoly market structure. It defines monopoly as a market with a single seller and no close substitutes for the seller's product. Characteristics of monopoly include barriers to entry like legal protections, control of essential resources, and economies of scale. The document outlines monopoly equilibrium, break-even point, and how profits and losses are calculated. It also introduces Lerner's measure of monopoly power and provides an overview of the Indian Railway system as an example of a public monopoly industry.

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    Monopoly of Indian Railway

    Uploaded by

    Nawnit Kumar
    2K views16 pages
    This document discusses monopoly market structure. It defines monopoly as a market with a single seller and no close substitutes for the seller's product. Characteristics of monopoly include barriers to entry like legal protections, control of essential resources, and economies of scale. The document outlines monopoly equilibrium, break-even point, and how profits and losses are calculated. It also introduces Lerner's measure of monopoly power and provides an overview of the Indian Railway system as an example of a public monopoly industry.

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    This document discusses monopoly market structure. It defines monopoly as a market with a single seller and no close substitutes for the seller's product. Characteristics of monopoly include barriers to entry like legal protections, control of essential resources, and economies of scale. The document outlines monopoly equilibrium, break-even point, and how profits and losses are calculated. It also introduces Lerner's measure of monopoly power and provides an overview of the Indian Railway system as an example of a public monopoly industry.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    2K views16 pages

    Monopoly of Indian Railway

    Uploaded by

    Nawnit Kumar
    This document discusses monopoly market structure. It defines monopoly as a market with a single seller and no close substitutes for the seller's product. Characteristics of monopoly include barriers to entry like legal protections, control of essential resources, and economies of scale. The document outlines monopoly equilibrium, break-even point, and how profits and losses are calculated. It also introduces Lerner's measure of monopoly power and provides an overview of the Indian Railway system as an example of a public monopoly industry.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 16
    At a glance
    Powered by AI
    The key takeaways are the definition and characteristics of monopoly, barriers to entry in monopoly, and how monopoly determines profit maximizing output.

    The characteristics of monopoly are that there is only one seller, no close substitutes for the product, and the seller is a price maker.

    Barriers to entry in monopoly include legal barriers like patents, control of essential resources, and economies of scale.

    Presented By NAWNIT KUMAR

    CONTENTS
    What is monopoly?

    Characteristic of monopoly
    Why barriers to entry? Monopoly Equilibrium

    Break even point


    Profit in monopoly Loss in monopoly Measuring monopoly power Indian Railway Price maker

    What is monopoly?
    Monopoly is a form of market structure in which a single seller or firm has control over the entire market supply, as there are no close substitutes for his product.
    For example:- Indian Railway is a public monopoly industries

    Characteristic of monopoly
    Only one seller and many buyers No substitute

    Price maker
    Entry barriers:- There are legal, technological,

    economical or natural obstacles, which may block the entry of new firm.

    Why barriers to entry?


    (1)Legal Barriers: patent - grant of an exclusive right to use a specific

    process or produce a specific product for a period of time. licenses and franchises - permission, granted by a government, to enter an industry or occupation.
    (2)Control of an essential resource:- It is essential because

    to protect country or social welfare. For example- arm and ammunition industries, uranium refining company. DeBeers controls the worlds diamond trade.

    (3) Economies of Scale:-Costs per unit in an industry may be low only when a firm produces a lot of output. Consequently, small firms will be unable to enter the industry because costs are too high.

    Monopoly Equilibrium

    Equilibrium point MR=MC

    Break even point

    Profit in monopoly

    Profit area

    AR=Demand AR=Demand

    Loss in monopoly

    P1 P2

    AR=Demand

    Measuring monopoly power


    Lerners measure:- difference between price and marginal cost measures the degree of monopoly. A/c to him, degree of monopoly power is the reciprocal of the price elasticity of demand. Degree of monopoly power = (P MC) = P 1 e

    Indian Railway
    Indian Railways (IR) is largest railway system in Asia and the second largest in the World. The railways cover a total length of 63,940 km. IR operates more than 14,244 trains daily, including about 8,002 passenger trains.

    (Rupees in crore)

    PROFIT

    Price maker
    Every year, Indian railway minister give railway budget. According to 2011 railway budget Concession for male senior citizens has been increased by 10% to 40% no increase in freight rate. Reduction in AC1 - 7% and AC2 - 4% 5% discount across board for passenger fare beyond Rs50 for all suburban second class. Its motive not only profit maximization but also social welfare .

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