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FutureStarrDefinition of a Monopolyor
A monopoly exists when a company is the only one selling a specific product or service he or she decides to make. This allows a monopolist to have a large level of market share and to stay ahead of rivals. They gain much of this market strength through over-investment in marketing and research and development, which can sometimes lead to high prices that may result in market power. What do you think determines a monopoly? Is it a single seller? Is it a market where no other player can compete?
A monopoly (from Greek μÏŒνος, mónos, 'single, alone' and πωλεá¿–ν, pÅleîn, 'to sell') is as described by Irving Fisher, a market with the "absence of competition", creating a situation where a specific person or enterprise is the only supplier of a particular thing. This contrasts with a monopsony which relates to a single entity's control of a market to purchase a good or service, and with oligopoly and duopoly which consists of a few sellers dominating a market.
In economics, the idea of monopolies is important in the study of management structures, which directly concerns normative aspects of economic competition, and provides the basis for topics such as industrial organization and economics of regulation. There are four basic types of market structures in traditional economic analysis: perfect competition, monopolistic competition, oligopoly and monopoly. A monopoly is a structure in which a single supplier produces and sells a given product or service. If there is a single seller in a certain market and there are no close substitutes for the product, then the market structure is that of a "pure monopoly". Sometimes, there are many sellers in an industry or there exist many close substitutes for the goods being produced, but nevertheless companies retain some market power. This is termed "monopolistic competition", whereas in an oligopoly, the companies interact strategically. (Source: en.wikipedia.org)