monopoly

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monopoly

(mənōp`əlē), market condition in which there is only one seller of a certain commodity; by virtue of the long-run control over supply, such a seller is able to exert nearly total control over prices. In a pure monopoly, the single seller will usually restrict supply to that point on the supply-demand schedule that will maximize profit. In modern times, the accelerated production and competition brought about by the Industrial Revolution led to the formation of monopoly and oligopoly. Since the notion of monopoly is antithetical to the free market ideal, it has never been popular in capitalist nations. In the United States, the most famous monopoly was John D. Rockefeller's Standard Oil Trust in the late 19th cent. Despite such legislation as the 1890 Sherman Antitrust ActSherman Antitrust Act,
1890, first measure passed by the U.S. Congress to prohibit trusts; it was named for Senator John Sherman. Prior to its enactment, various states had passed similar laws, but they were limited to intrastate businesses.
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 (the first significant legal statute against monopoly), it was the Supreme Court that forced the break-up of Standard Oil, along with other monopolies. Since the 1960s, however, the U.S. Justice Dept. has occasionally been more active in attacking monopolies or near monopolies (such as AT&T and IBM); a major case in the 1990s involved the Microsoft Corp. (see Bill GatesGates, Bill
(William Henry Gates 3d), 1955–, American business executive, b. Seattle, Wash. At the age of 19, Gates founded (1975) the Microsoft Corp., a computer software firm, with Paul Allen. They began by purchasing the rights to convert an existing software package.
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).

Many governments, however, have created public-service monopolies by laws excluding competition from an industry. What resulted were generally publicly regulated private monopolies, such as some power, cable-television, and local telephone companies in the United States. Such enterprises usually exist in areas of "natural monopoly," where the conditions of the market make unified control necessary or desirable to the public interest. Some socialists have advocated the extension of the principle of public monopoly to all vital industries, such as coal and steel, that have an immediate effect on the general welfare of the economy. By the 1990s, however, many public utilities in the United States and elsewhere were deregulated, allowing for competition and lower prices (see utility, publicutility, public,
industry required by law to render adequate service in its field at reasonable prices to all who apply for it. Public utilities frequently operate as monopolies in their market.
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).

Aside from utility companies, privately controlled monopolies without state support are rare. However, the concentration of supply in a few producers, known as oligopoly, is not uncommon. In the United States, for instance, several large companies have dominated the automobile and steel industries. Since the Progressive era, the U.S. government has made most forms of monopoly, and to a lesser extent oligopoly, illegal under antitrust laws. The objective of such measures is to guarantee that price will be determined by market forces rather than by arbitrary price setting among corporations. In recent years oligopolies have grown through mergers and acquisitions. The government still grants temporary monopolies in the form of patents and copyrights to encourage the arts and sciences.

Bibliography

See J. Robinson, The Economics of Imperfect Competition (2d ed. 1969); D. Dewey, The Antitrust Experiment in America (1990); T. Freyer, Regulating Big Business: Antitrust in Great Britain and America, 1880–1990 (1992).

monopoly

a commodity market for a particular product dominated by a single producer, who is thus able to control prices. Where a small number of producers dominate a market the term oligopoly is used. Compare PERFECT COMPETITION.

monopoly

1. exclusive control of the market supply of a product or service
2. 
a. an enterprise exercising this control
b. the product or service so controlled
3. Law the exclusive right or privilege granted to a person, company, etc., by the state to purchase, manufacture, use, or sell some commodity or to carry on trade in a specified country or area

Monopoly

™ a board game for two to six players who throw dice to advance their tokens around a board, the object being to acquire the property on which their tokens land
www.hasbro.com/monopoly
References in periodicals archive ?
47) Assuming there is a competitive market for the end product whose input the monopolist controls, monopolists may charge downstream firms one fee or royalty per product and thereby induce downstream firms to produce only the monopoly quantity.
After observing the length of copyright protection, a profit-maximizing monopolist draws [alpha] and [gamma] from the cumulative distribution function F([alpha], [gamma]).
that is the percentage change in marginal revenue equals the time rate of profit, "r", meaning that in every moment of time monopolist owners' marginal revenue amounts to the market rate of return.
But the monopolist is certainly able to pay less than his maximum buying price for the restricted quantity of factors.
Ask the monopolist to observe the facial expressions and body language of others when he/she speaks.
Section 3 derives the optimal pricing equations for the profit-maximizing monopolist and the public agency, while section 4 gives the main pricing results for these two organizations, first under the assumption that the key elasticities are fixed, and then more generally.
It is a straightforward exercise to calculate the profits of the monopolist ([[PI].
Besides, Russian gas monopolist plans to set up a joint venture in Libya.
Labour's Lord Borrie, a former Director General of Fair Trading, hit back: "In many situations the car park operator is a monopolist.
Our findings highlight the "competing-with-itself" aspect of being a monopolist of a durable good: the monopolist must innovate to stimulate demand through upgrades.
Polish gas monopolist PGNiG and Danish utility Energinet.
He said Gazprom did not intend to become a global gas monopolist, adding: "Gazprom is not going to take over the gas business in Algeria, Qatar or anywhere so as to become a global monopolist".