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 ?
Consequently, the number of irregularities detected undoubtedly proves the prevalence of monopolistic practices between companies operating in the fertiliser sector.
The anti-trust bill, now approved by both House and Senate, aims to check monopolistic practices in the business sector.
Our second economy introduces monopolistic competition without allowing for product space variations through net business formation.
It is in charge of the examination and regulation of price-related monopolistic practices.
However, Kirzner advocates that entrepreneurship is an important dynamic that will maintain equilibrium in the market and argues that even in a monopolistic market, competition becomes possible thanks to the efforts of entrepreneurs.
If the assessment that links the brutal strikes on Gaza at present with the upcoming general elections in Israel, or with the need to divert attention away from the political battle for the Palestinian state at the UN, is true, then one may say that the Israeli monopolistic penchant is only exceeded by its abhorrent supremacist and racist attitudes.
After CCI rejected Ajay's plea alleging YRF of monopolistic practices, he moved on the Appellate Tribunal to fight for his rights.
17, Grybauskaite, speaking on Ziniu Radijas, accused Vilniaus Energija, which operates the Vilnius heating system, of abusing its monopolistic position in Vilnius.
In reply, member of the parliament's National Security and Foreign Policy Commission Esmail Kowsari told FNA that such remarks prove the US officials' monopolistic attitudes and approaches.
According to Frckovski, at the end, our position should remain with an unchanged constitution, around 60 countries that recognize us under our constitutional name, a name as a substitute for FYROM, the Republic of Northern Macedonia used in international organizations and our un monopolistic possibility to use the adjective " Macedonian" for the language and identity.
It is sometimes a challenge having just three wholesalers in a monopolistic industry--with just two it will be an unmitigated disaster.
ACE USA, the US-based retail operating division of the ACE Group of Companies, headed by ACE Limited (NYSE: ACE), whose subsidiaries provide property and casualty insurance and reinsurance products to commercial and individual customers, announced on 30 May the launch of a new audio podcast, which provides information in preparation for the transition of the West Virginia Workers Compensation marketplace from a monopolistic to a competitive marketplace, as of 1 July 2008.