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Economics vocabulary · Markets, Supply and Demand

Monopoly

Meaning in economics, with examples

/məˈnɒpəli/nounCore term

In economics, monopoly means: A market in which a single firm is the only seller of a product with no close substitutes, which gives it the power to set prices.

In Turkish: tekel, monopol

How it is used

A standard market structure in microeconomics, studied alongside perfect competition, oligopoly and monopolistic competition. In real life, a firm has or holds a monopoly on something, and competition authorities try to regulate or break up monopolies.

Example sentences

  1. A water company is often a natural monopoly, because building two separate pipe networks would make no sense.

  2. Because it has a monopoly, the firm can charge higher prices than it could in a competitive market.

Common collocations

  • have a monopoly on
  • natural monopoly
  • state monopoly
  • monopoly power
  • break up a monopoly
  • competitionRivalry between firms that sell similar products and try to win the same customers, which tends to push prices down and quality up.
  • market failureA situation in which a free market, left alone, does not produce an efficient outcome for society, so too much or too little of something is produced.
  • marketAny arrangement, physical or online, where buyers and sellers meet to exchange goods, services or assets, and where prices are formed.
  • marginal costThe extra cost of producing one more unit of a good or service; a key idea when a firm decides how much to produce.

More terms: Markets, Supply and Demand

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