A few important reasons of emerging monopoly are as follows.
1. Centralization of Raw material:- When the raw material of the production of a particular commodity is centralised at a particular place, monopoly situation emerges. For example, Bengal was having monopoly of Jute industry before the partition of the country.
2. Legal Monopoly:- Some monopoly is established through the law. For example, when the government provides monopoly power of water distribution in a particular city to a particular industry, it gives birth to legal monopoly.
3. Cut throat competition:- When firm make cartels for saving them from cutthroat competition and controlling the supply of the commodity, monopoly emerges.
4. Patent rights:- Patent rights also create monopoly situation. Producers obtain patent right or trademark monopoly regarding the shape, design or other characteristics of the product. Patent right prohibit the use of trademark by others.
