When one controls the supply of a good or service, this market condition is referred to as a monopoly. In a monopoly, a single company or entity has significant control over the entire supply, which often leads to significant barriers to entry for other competitors. This control enables the monopolist to influence prices since it is the sole supplier in the market.

Monopoly and Market Power

• A monopoly happens when a single firm dominates the supply of a product or service.
• The firm's control over supply allows it to set prices, often leading to higher prices and restricted output compared to competitive markets.
• This market power distinguishes a monopoly from markets where supply is controlled by many competitors.

Economic Implications

• Monopolies can lead to inefficiencies and less choice for consumers because the monopolist can limit supply to raise prices.
• Other market structures where supply control is diffused usually have more competitive pricing and output levels.

Thus, when one entity controls the supply, it typically results in a monopoly, a distinct economic condition with significant market influence.