This implies that it is in full control of the majority of the market share of its goods and services. In business, a monopoly refers to a company that dominates the entire sector or industry. ![]() These economies see this market situation as a factor that leads to price gouging and deteriorating quality as a result of a lack of alternative choices for consumers. In free-market economies, monopolies are usually discouraged. That is, a single company dominates the industry. In other words, the term refers to a dominant position of an industry, that is a sector that is controlled by a single entity to a point of eliminating or excluding every other viable competitor. Monopoly in economicsĪ monopoly is a market structure in which an individual or a group of individuals acting as a unit have control over the total output or the supply of goods and services without any close substitute. In other words, when a company dominates a business sector or an industry, it can use that monopoly power to its own advantage at the expense of its consumers. Also, a company can gain or maintain a monopoly power or position through unfair practices that suppress competition thereby denying consumers of their choice. A monopoly can as well develop naturally. On the other hand, the government can enforce and encourage monopolies of certain essential services such as utilities for certain reasons. ![]() In other words, no competitor can break into the market because of the fact that a single company is in control of the industry.Īlso, they can concentrate wealth, power, and influence in the hands of a single or few individuals. That is a single entity is in charge of the industry with the absence of any form of rivalry. Monopoly in its real context refers to a dominant position of an industry, that is a sector that is controlled by a single entity to a point of eliminating or excluding every other viable competitor.
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