A monopoly has to have all of the following in order for it to be classified as a true monopoly, if it doesn't then it is not really a monopoly: Single seller- only one provider in an industry, No close substitutes- cannot be replaced, Price maker- it can control price of a product without having to satisfy consumers, Blocked entry- there is no way that a competitor can enter the market.
If a company has a download sloping demand curve then it is said to have monopoly power. A price taker has a horizontal demand curve. So, in order to calculate the way a monopoly works and how it manages money and output, we must use a calculation:
The monopoly's profit is its total revenue less its total cost. Let the price it sets as a market response be a function of the quantity it produces (Q) P(Q) and let its cost function be as a function of quantity C(Q). …
