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.
Causes for Monopoly. Causes for Monopoly: 1. Natural: A monopoly might arise on account of certain natural causes. Some minerals are accessible only in certain areas. For illustration, South Africa has the monopoly of diamonds; nickel in the globe is mostly obtainable in Canada and oil in Middle East. It is natural monopoly. 2. Technical: Monopoly power might be enjoyed due to technological reasons. A firm might have control over raw materials, scientific knowledge, special know-how, scientific secrets and formula which enable a monopolist to generate a commodity. 3. Legal: Monopoly power is attained via patent rights, copyright and trade marks by the producers.