Written by the Fiveable Content Team • Last updated September 2025
Written by the Fiveable Content Team • Last updated September 2025
Definition
A pure monopoly exists when a single company is the only supplier of a particular product or service in the market, with no close substitutes. This situation allows the monopolist to control market prices and output levels.
Related terms
Market Power: The ability of a firm to influence or control the terms and conditions of the market in which it operates, often through controlling prices or supply.
Barrier to Entry: Economic, legal, technological, or other types of hurdles that protect a firm from potential competitors by preventing or discouraging them from entering an industry.
Price Maker: A firm that has the power to influence or set prices for its products because it does not face direct competition in its market