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Monopoly

Definition

A monopoly refers to a market structure where there is only one seller or producer of a particular good or service, giving them complete control over the market and the ability to set prices.

Analogy

Imagine you are the only person in your school who sells a popular snack. Since you're the only one who has it, you can charge whatever price you want because everyone wants it and has no other choice.

Related terms

Market Power: Market power refers to the ability of a firm or seller to influence and control the market by setting prices, output levels, and making decisions without facing significant competition.

Barriers to Entry: Barriers to entry are obstacles that make it difficult for new firms to enter an industry or market, such as high startup costs, patents, or exclusive access to resources.

Price Discrimination: Price discrimination occurs when a seller charges different prices for the same product or service based on factors like location, age group, or customer type.