A monopoly is a market structure in which a single seller controls the entire supply of a good or service in a particular market, faces little to no competition, and often has the power to influence prices. This typically occurs when there are high barriers to entry that prevent other firms from entering the market, and when there are few or no close substitutes for the product or service. Key ideas

• Single seller: One firm provides the good or service, with no close competitors in the market.
• Price maker: The monopolist can set prices, within the constraints of demand, rather than taking prices as given by a competitive market.
• Barriers to entry: Obstacles such as high startup costs, control of a critical resource, regulatory protections, network effects, or economies of scale that deter or prevent new competitors.
• Market power and efficiency: Monopolies can lead to higher prices and reduced consumer surplus, but may also invest in innovations or efficiencies. The overall welfare impact depends on various factors, including the nature of the barrier to entry and potential deadweight losses.

Variants and related concepts

• Pure monopoly: A market with a single seller and no close substitutes.
• Monopolistic power without formal monopoly: A market may have several firms but still exhibit significant market power (monopolistic competition or oligopoly).
• Government monopolies: Public agencies or regulated entities that are the sole provider, often with price or output controls.

Legal and policy perspective

• Antitrust and competition policy exist to prevent unjustified monopolies or abuses of market power, aiming to preserve competition and protect consumers.
• Not all monopolies are illegal; legality often depends on how power is acquired and exercised, and whether it harms competition.

If you’d like, I can tailor this to a specific country’s legal framework or provide concrete historical or contemporary examples of monopolies and the regulations surrounding them.