6 B. Monopoly

Features: single seller of a good with no close substitutes; strong barriers — legal (patents, licences, exclusive state franchises — the lawyer's home ground), natural (economies of scale: one grid beats three), control of a key resource. Price/output: the monopolist is a price maker — chooses output where MR = MC, then charges the price the demand curve allows: P > MC — the markup; output smaller and price higher than the competitive benchmark (the deadweight loss — society's measure of monopoly's cost). Price discrimination: charging different buyers different prices for the same good (student/lawyer journal subscriptions; electricity tariffs by customer class; airline seats) — degrees: first (perfect), second (by quantity/block), third (by identifiable group). Legal relevance: discrimination is lawful business in some markets, an abuse of dominance in others. Nepali illustrations: Nepal Electricity Authority (distribution — natural monopoly, regulated tariff); Nepal Oil Corporation (petroleum import/supply monopoly); historic telecom monopoly before liberalisation. Policy point (write it): the legal remedies are regulation of price (cost-of-service tariff-setting), competition law against abuse of dominance, and contestability — keeping entry open.