Business
What is A monopoly?
A monopoly is when a single company controls an entire market for a product or service, with no real competition. Without rivals, it can raise prices and limit choice — which is why governments often regulate or break up monopolies.
See it, don’t just read it.
Watch a 2-minute lesson with voice + animation that explains a monopoly.
Key things to understand
- 1One seller dominates the market with no close substitutes.
- 2It can set high prices because buyers have nowhere else to go.
- 3It may reduce innovation and quality without competitive pressure.
- 4Some arise naturally (utilities); others by buying out rivals.
- 5Antitrust laws exist to limit or break up harmful monopolies.
Frequently asked questions
- Why are monopolies a problem?
- Without competition, a monopoly can charge more, offer less, and innovate slowly, since customers have no alternative.
- Are all monopolies illegal?
- No — some, like local utilities, are allowed but regulated; the law targets monopolies that abuse their power to harm competition.
- What are antitrust laws?
- Laws that promote competition by restricting monopolies, price-fixing, and mergers that would give one firm too much market control.