This means that once the transfer agents at the bank medallion stamp the bond, it is highly liquid on the second market. Thus, a bond is a form of loan or IOU: the holder of the bond is the lender (creditor), the issuer of the bond is the borrower (debtor), and the coupon is the interest. Bonds provide the borrower with external funds to finance long-term investments, or, in the case of government bonds, to finance current expenditure.
Chamberlainâs monopolistic competition is the blending of competition and monopoly. The most distinguishing feature of monopolistic competition is that the products of various firms are not identical but different although they are close substitutes for each other.
A monopoly is when a company has exclusive control over a good or service in a particular market.Not all monopolies are illegal; for example, businesses that produce a superior product or are well managed may disadvantage their competitors while not violating antitrust law.ere are some examples of how illegal monopolies are formed: 1  Price Fixing: competitors agree to buy or sell products or services at a fixed price or rate. 2  Price Discrimination: selling similar goods to buyers at different prices.