Why is there no competition in a monopoly?

In economics monopoly and competition signify certain complex relations among firms in an industry. A monopoly implies an exclusive possession of a market by a supplier of a product or a service for which there is no substitute.

Think of it as an Airline that has an exclusive route from x to y. They can charge whatever they want since there is no other carrier flying that route. Air Canada is famous for that. Let's say three Airlines fly from point x to point y.

Let's also assume that Alaska Airline (or any other of your choosing) has the same route but Alaska Airline is cheaper. Air Canada will undercut these prices at a great loss to get rid of the competition and immediately raises the prices.

terms in this set (38) portuguese explorer. in 1497-1498 he led the first naval expedition from europe to sail to india, opening an important commercial sea route.(sailed around africa to india).portuguese navigator who sailed around the cape of good hope and reached the west coast of india in search of spices.

i think it is the third one.