Economics A-Level
Monopoly power
What Monopoly power means in Economics A-Level, as defined for AQA.
Definitions of Monopoly power
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Reference: AQA
Privatisation risks creating private monopolies that exploit consumers through higher prices, especially in natural monopolies like water infrastructure.
The potential indicated by a high concentration ratio, which economists use to assess the degree of power within an industry.
A degree of power held by a firm enabling it to act as a price maker rather than accept a market price.
Its abuse is what competition policy targets, rather than the existence of monopolies themselves.
A position in which firms are protected by high barriers to entry and are making large profits.
The ability of a firm to act as a price maker, setting prices above marginal cost.
Topics that use Monopoly power
- Competition policy (AQA A-Level)
- Monopoly and monopoly power (AQA A-Level)
- Oligopoly (AQA A-Level)
- Price discrimination (AQA A-Level)
- Public ownership, privatisation, regulation and deregulation of markets (AQA A-Level)
- The dynamics of competition and competitive market processes (AQA A-Level)
Related terms
- Allocative efficiency
- Allocative inefficiency
- Consumer surplus
- Dynamic efficiency
- Firm behaviour
- Government failure
- Market concentration
- Non-price competition
Using Monopoly power in the exam
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