monopoly

Definition

A situation in which a single company owns all or nearly all of the market for a given type of product or service. This would happen in the case that there is a barrier to entry into the industry that allows the single company to operate without competition (for example, vast economies of scale, barriers to entry, or governmental regulation). In such an industry structure, the producer will often produce a volume that is less than the amount which would maximize social welfare.

Use monopoly in a sentence

The gas stations in my area all have high gas prices because of the monopoly here where there is one owner for all the stations.

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The acquisition of T-mobile by Sprint was hindered by the prospect of the new company becoming a monopoly which would have resulted with the merger causing one company to have over a 60% share in the phone communication industry.

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A large bank has decided to acquire another large bank. The only hurdle would be the laws and restrictions based on if this new organization would be considered a monopoly.

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