Start Encyclopedia69 Dictionary | Overview | Topics | Groups | Categories | Bookmark this page.
dictionary -  encyclopedia  
Full text search :        
   A   B   C   D   E   F   G   H   I   J   K   L   M   N   O   P   Q   R   S   T   U   V   W   X   Y   Z   #   




  Monopoly (Greek, ‘sole seller’), in economics, is a market condition in which a single seller controls the supply of a product for which there are no close substitutes, and restrictions prevent new firms from entering the market. The single seller is a single, decision-making unit, for example, an individual, a firm, a cartel, etc. The monopolist may set any price, but the quantity sold at any price will be determined by the buyers\' willingness to buy.

A natural monopoly is one which exists because two or more firms operating in the market would be grossly inefficient, since a single firm faces a decreasing long-run average cost curve over the relevant range of output. One person\'s natural monopoly is another\'s anti-trust suit, but currently accepted natural monopolies would include utilities distributing electric power or telephone service in a local market. Even these ‘natural’ monopolies, however, may be threatened by future competition.

In practice, monopolies are rarely absolute. A few are enshrined in law—for example, patent and copyright laws grant temporary monopolies. In general, though, the scope for absolute monopoly is limited by near-competitors, international trade and anti-trust laws. TF

See also monopolistic competition; monopsony; oligopoly.



Bookmark this page:



<< former term
next term >>
Monopolistic Competition


Other Terms : Career | Contemporary History | Linguistic Typology
Home |  Add new article  |  Your List |  Tools |  Become an Editor |  Tell a Friend |  Links |  Awards |  Testimonials |  Press |  News |  About |
Copyright ©2009 GeoDZ. All rights reserved.  Terms of Use  |  Privacy Policy  |  Contact Us