A pure monopoly exists when a single firm is the sole producer of a product for which there are no close substitutes.
What is a Monopoly?
- A monopoly is a market arrangement where one producer or seller holds a disproportionate amount of power within a certain market.
- Monopolies are forbidden in free-market economies as they limit customer alternatives and impede competition.
- Antitrust laws are in existence in the US to prevent monopolies, guaranteeing that one company cannot dominate a market and take advantage of its dominance to take advantage of its customers.
- A monopoly restricts the number of product alternatives accessible and makes it difficult for rivals to enter the market.
- Monopolies may result in dishonest business practices.
- Government regulations apply to certain monopolies, such as those in the utility industry.
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