A monopoly and πωλεá¿–ν pÅleîn ) exists when a specific person or enterprise is the only supplier of a particular commodity . Monopolies are thus characterized by a lack of economic competition to produce the good or service, a lack of viable substitute goods,...
A monopoly and πωλεá¿–ν pÅleîn ) exists when a specific person or enterprise is the only supplier of a particular commodity . Monopolies are thus characterized by a lack of economic competition to produce the good or service, a lack of viable substitute goods, and the possibility of a high monopoly price well above the firm's marginal cost that leads to a high monopoly profit. The verb monopolise or monopolize refers to the process by which a company gains the ability to raise prices or exclude competitors. Likewise, a monopoly should be distinguished from a cartel , in which several providers act together to coordinate services, prices or sale of goods. If there is a single seller in a certain industry and there are not any close substitutes for the product, then the market structure is that of a "pure monopoly". In general, the main results from this theory compare price-fixing methods across market structures, analyze the effect of a certain structure on welfare, and vary technological/demand assumptions in order to assess the consequences for an abstract model of society. Most studies of market structure relax a little their definition of a good, allowing for more flexibility at the identification of substitute-goods. Barriers to exit are market conditions that make it difficult or expensive for a company to end its involvement with a market.