What Is a Monopolistic Market?

A monopolistic market is a theoretical situation in which only one firm may sell goods and services to the whole population. A completely competitive market, in which an unlimited number of businesses compete, is the polar opposite of a monopolistic market. In a completely monopolistic model, a monopoly business can limit output, raise prices, and reap super-normal profits over time.
Although complete monopoly is uncommon, there are times when firms control a significant percentage of the market, in which case antitrust rules apply.

The monopolistic market is where large number of buyer and seller. Producers produce differential product and close substitute to each other.

Feature of monopolistic Market

  1. fairly large number of buyer

  2. fairly large number of seller

  3. close substitute

  4. product differential

  5. selling cost

  6. free entry free exit

  7. normal profile