goodnight you're 12 welcome to lesson number 70 from one of my textbooks the distinction about student we're 12 but we also have played 11 ends with 10 right in the previous lesson I gave you this comment easy differentials from okay I said it a thousand times now monopoly is a market structure that has one seller and many buyers and this seller is selling a product that is said to be unique so there's a reason why you you'll be the only firm in the entire industry in some cases you will see that by law you should be the one different like in case of ESCO for example now what else can make you a monopoly maybe you bring a genius like at this moment we are having this problem of copy 19 and let's say you come up with a drug that can cure copied 19 you be the only person in the entire world that knows how to make the track so in that case you become a monopoly so you start manufacturing this copy 19 drug and people who have symptoms and are suffering from the disease they can they take the drug and then they test negative so that means it becomes that disease which has cure and you are the only business that knows how to make the drug so in that case you become a monopoly alright so you become the holding firm manufacturing that particular drug the entire world okay right right now what are the characteristics now when we look at these characteristics remember I told you we have to use this so we are going to use it because this is the classification of market is what we use so you always want to hear this number of businesses nature of product entrance control over price information and examples demand curve economic profit decision-making collusion allocated efficiently all right so we'll get to that one when one let's move first number of firms have answered already there is only one single firm the entire industry the next one is the little product I mentioned it already I said the product is unique if that means it is not well substitute the next one means entry entry is restricted now it can be restricted by law these are some of the things that can restrict people to enter the industry for example patents now patent bow those rights that make you the exclusive producer or manufacturer of a product that you invented yourself so you invent let's say if ok do you know that in 2007 Steve Jobs did a keynote when he was introducing the iPhone and in that keynote he he was introducing the tight and he said some cell phone out there they say they stare say to be smart but they are not smart after all and he introduced the touchscreen and it was a breakthrough invention by Apple but now Steve Jobs and Apple did not patent the invention so it didn't give them the exclusive rights to manufacture cell phones with a touchscreen so what happened after that many other cell phones started introducing they copied Apple and they started producing cell phones that have touchscreen so Apple did everyone else a favor by not putting patents on the inventor you see that all right so if he had it would make them it would make Apple only firm in the entire world that produces cell phones with a touchscreen and if the pattern goes for 20 years that was 2007 and it would end into 2027 imagine right licenses let's say you want to compete with Escom in a Backson problem is you can't get the license so energy is completely blocked or the sole rights or okay I think the Eskimo movie this one there's only one valid the right to produce electricity in South Africa the licensed one you know probably more or less the same import restrictions and so on so these are reasons or that will cause these barriers to entry to exist the next is producing but college agree we say it's impossible remember say collusion is when friends can sit down and discuss ways in which they can minimize competition between themselves now can Eskom sit down and as Foreman discuss how s tremendous pumpkin minimize competition between s competitors from information now information is supposed to be complete which is available for a monopolist all the information on the market she's available that means information it's complete to both buyers and sellers this means that they are no uncertainties this assumption also applies in case of the monopoly but the next one is control over price we are only when making a certain item so you have the price make up the reason so it means your opposites a perfect because a perfe competitor is a price taker price maker the reason is you're the only one the next one is demand curve now the demand curve for this type of a market structure is like this this is you so this is this is your this is your downward sloping demand curve and all right so you tomato curve is downward sloping and you can see how inelastic it is when price changes quantity demanded does not change as much you will see when I come in the last lesson of this whole chapter right here so I have explained that what the demand curve that is down a sloping and already you can see just like I said before if outputs changes it increases the price if output increases the price drops so it depends on what but but now the the question is how much it Damona is produce and again the same answer that that is what makes the dynamic dynamic of perfect and imperfect market the easiest two topics in the entire syllabus because the same apply in all right the next one is non-price competition should I talk about it maybe not let me talk about it for other reasons okay nonetheless competition exists here it happens in mainly only property and monopolistic in a way they do not press competition which is competing on other basis other than price so they don't really say try to attract firms to attract buyers by reducing their price they because they in only company their demand curve is kinked so if they do that they won't be able to make the most profit so in unaccompanied they have to produce where the demand curve Kings explained when we get to oligopoly but for now I just want to explain the concept of competition which is if we look at banks they find other ways besides bank charges to attract people to bank with them if we look at Capitec they've gained a lot of people you know will Bank with cap you take so many people switch to their salaries to capital one of the things people like about capital is if you already have a contact in your phone then if you want to send the money you don't need to ask for their account number you just use their cell phone number to send the money that's easy and Capitec also changes a trend to pay and key so if you paying someone who uses net bank and you want that money to clear now it's a trend net bank does that as well but they charge 10 rent but for amounts that are less than 2000 2000 or less so if you want to send someone 2500 and we have met bank and that person is FNV they'll have to charge you now more but if you want to send do you see that they don't really compete on prices but they have other ways in which they compete so besides bank choices and ho that because they are talking about money they could say look at heaven be when they started they see one thing and now so many people came to FNP because of a wallet and now everyone else copied the idea look at ATM deposits I think a friendly started you could deposit money with FNP at the ATM so you don't care about the branch hours so even if the branch is closed you can still go into posit - you see that was convenient so these firms that I in or decock when they use the non price competition they advertise they come up with unique ways of you know so people subscribe to F and B or observe all for different reasons other than the bank charges or price so that is what we call non-price competition it's competing it's trying to gain customers by using other ways besides packs so if you see with monopoly that cannot happen because you are the only competitor but the next one is decision making decision making is independent because you have the only firm so what'd you decide does not affect other firms because they don't exist at all the next one is productive efficiency unfortunately and one employee will not be able to achieve productive efficiency as firms will produce it an output which is less than an output of minimum ATC so they cannot achieve productive efficiency they cannot produce it they they don't have a competition that's why so they can do it the way unfortunately our game these guys cannot achieve allocative efficiency a monopolist can never achieve allocative efficiency it will always produce 2q of its goods or services and will always charge too much for it or they're in a monopoly entries blood and so the monopoly remains free to charge a higher price and produce at a lower cost so that what consumers a really neat as for might not be able to meet their meet their needs because they have other things that they are learning about which is making money all right examples we have transmitted years of Africa and we have escort right so yes your draw this is possible because we have done perfect already but use price use profit use quantities and use costs alright so this concludes the lesson and we'll see you in the next lesson