Q.Explain the features of monopoly. What is price discrimination, and on what bases is it commonly practised?

The missing term is Monopoly.

In a perfectly competitive market there are many sellers of a homogeneous product and a single ruling price prevails for all buyers. In contrast, a monopoly is a single seller with control over supply and no close substitutes; such a seller can practise price discrimination — charging different prices to different buyers (or in different markets) for the same commodity. Hence a s …

The odd word is OPEC.

A legal (statutory) monopoly arises when the law grants an exclusive right to a producer. Patents (exclusive right to an invention), copyrights (exclusive right over creative/literary work) and trademarks (exclusive right over a brand mark) are all such legally created monopolies. OPEC (Organization of the Petroleum Exporting Countries) is instead an international cartel — an agreement among oil-exporting countries …

The odd word out is OPEC. Patent, copyright and trademark create a legal monopoly granted by law, whereas OPEC is a collusive cartel (a combination of firms/countries). Odd one: OPEC.

Why: A monopoly can arise from different sources. A legal monopoly is one conferred and protected by the law of the land:

• Patent — exclusive legal right to produce/sell an invention.
• Copyright — exclusive legal right over a literary/artistic work.
• Trademark — exclusive legal right over a brand/symbol. …

The economic term is Price discrimination — a monopolist charging different prices to different consumers for an identical product or service. Answer: Price discrimination.

Why: Under monopoly a single seller has full control over supply and can, in certain conditions, split the market and charge each group the price it is willing to pay. Selling the same good/service at different prices to different buyers — based on their income, location, or intensity of demand …