monopoly
Sign in to saveA monopoly (from Greek and ) is a market in which one person or company is the only supplier of a particular good or service. A monopoly is characterized by a lack of economic competition to produce a particular thing, a lack of viable substitute goods, and the possibility of a high monopoly price well above the seller's marginal cost that leads to a high monopoly profit. The verb monopolise or monopolize refers to the process by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is a business entity that ha
AI overview
A monopoly occurs when one person or company is the only supplier of a particular good or service, giving them the power to set high prices without competition or substitute options available to customers. This matters because monopolies can charge prices well above their actual costs, earning unusually high profits while limiting consumer choice and the natural price competition that typically exists in markets with multiple sellers.
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Article
43 sectionsContents
- Market structures
- Characteristics
- Sources of monopoly power
- Monopoly versus competitive markets
- Inverse elasticity rule
- Market power
- Price discrimination
- Example
- Classifying customers
- Monopoly and efficiency
- Natural monopoly
- Government-granted monopoly
- Monopolist shutdown rule
- Breaking up monopolies
- Law
- Establishing dominance
- Relevant product market
- Relevant geographic market
- Market shares
- Other related factors
- Types of abuses
- Examples of abuses
- Historical monopolies
- Origin
- Monopolies of resources
- Salt
- Coal
- Persian filoselle (raw silk)
- Petroleum
- Steel
- Diamonds
- Utilities
- Transportation
- Foreign trade
- Professional sports
- Baseball
- American Football
- Examples of possible/potential monopolies
- See also
- Notes
- References
- Further reading
- External links
A monopoly (from Greek and ) is a market in which one person or company is the only supplier of a particular good or service. A monopoly is characterized by a lack of economic competition to produce a particular thing, a lack of viable substitute goods, and the possibility of a high monopoly price well above the seller's marginal cost that leads to a high monopoly profit. The verb monopolise or monopolize refers to the process by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is a business entity that has significant market power, that is, the power to charge overly high prices, which is associated with unfair price raises. Although monopolies may be big businesses, size is not a characteristic of a monopoly. A small business may still have the power to raise prices in a small industry (or market).
A monopoly may also have monopsony control of a sector of a market. A monopsony is a market situation in which there is only one buyer. Likewise, a monopoly should be distinguished from a cartel, in which several providers act together to coordinate services, prices or sale of goods. Monopolies, monopsonies and oligopolies are all situations in which one or a few entities have market power and therefore interact with their customers, or suppliers in ways that distort the market.