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What is a monopoly?
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Quick answer
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.
Key things to understand
- One seller dominates the market with no close substitutes.
- It can set high prices because buyers have nowhere else to go.
- It may reduce innovation and quality without competitive pressure.
- Some arise naturally (utilities); others by buying out rivals.
- Antitrust laws exist to limit or break up harmful monopolies.
People also ask
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.