noun \mə-ˈnä-p(ə-)lē\

: complete control of the entire supply of goods or of a service in a certain area or market

: a large company that has a monopoly

: complete ownership or control of something

plural mo·nop·o·lies

Full Definition of MONOPOLY

:  exclusive ownership through legal privilege, command of supply, or concerted action
:  exclusive possession or control
:  a commodity controlled by one party
:  one that has a monopoly

Examples of MONOPOLY

  1. The government passed laws intended to break up monopolies.

Origin of MONOPOLY

Latin monopolium, from Greek monopōlion, from mon- + pōlein to sell
First Known Use: 1534

Other Business Terms

amortize, caveat emptor, clearinghouse, divest, due diligence, emolument, green-collar, marque, overhead, perquisite


noun    (Concise Encyclopedia)

Exclusive possession of a market by a supplier of a product or service for which there is no substitute. In the absence of competition, the supplier usually restricts output and increases price in order to maximize profits. The concept of pure monopoly is useful for theoretical discussion but is rarely encountered in actuality. In situations where having more than one supplier is inefficient (e.g., for electricity, gas, or water), economists refer to “natural monopoly” (see public utility). For monopoly to exist there must be a barrier to the entry of competing firms. In the case of natural monopolies, the government creates that barrier. Either local government provides the service itself, or it awards a franchise to a private company and regulates it. In some cases the barrier is attributable to an effective patent. In other cases the barrier that eliminates competing firms is technological. Large-scale, integrated operations that increase efficiency and reduce production costs confer a benefit on firms that adopt them and may confer a benefit on consumers if the lower costs lead to lower product prices. In many cases the barrier is a result of anticompetitive behaviour on the part of the firm. Most free-enterprise economies have adopted laws to protect consumers from the abuse of monopoly power. The U.S. antitrust laws are the oldest examples of this type of monopoly-control legislation; public-utility law is an outgrowth of the English common law as it pertains to natural monopolies. Antitrust law prohibits mergers and acquisitions that lessen competition. The question asked is whether consumers will benefit from increased efficiency or be penalized with a lower output and a higher price. See also oligopoly.


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