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 classic literature ?
Astor should he be able to carry his scheme into effect; but they anticipated a monopoly of the trade beyond the mountains by their establishments in New Caledonia, and were loth to share it with an individual who had already proved a formidable competitor in the Atlantic trade.
Jarndyce said that he condoled with him with all his heart and that he set up no monopoly himself in being unjustly treated by this monstrous system.
It indeed is, as we have said, generally gainful for a person to contrive to make a monopoly of anything; for which reason some cities also take this method when they want money, and monopolise their commodities.
He faced the British public now with the question whether they wanted his secret or not; he was, he said perpetually, an "Imperial Englishman," and his first wish and his last was to see his invention the privilege and monopoly of the Empire.
Daylight still engaged in daring speculations, as, for instance, at the impending outbreak of the Japanese-Russian War, when, in the face of the experience and power of the shipping gamblers, he reached out and clutched practically a monopoly of available steamer-charters.
Korea she had made into a granary and a colony; treaty privileges and vulpine diplomacy gave her the monopoly of Manchuria.
Pickup and his pupils a complete monopoly of all the profit which could be extracted, in their line of business, from the feebly-buttoned pocket of the patron, and the inexhaustible credulity of the connoisseur.
He smiled at her, but she saw on his lips the unconscious and all but breathed sigh of renunciation, and with the instinctive monopoly of woman for her mate, she feared this thing she did not understand and which gripped his life so strongly.
They were forced, swept on by this inrolling tide of wealth which their monopoly magnet irresistibly attracted.
Forgive me," he said, "if I ask leave to interfere with your monopoly of Arnold for a little while.
There's no reason why we should let the men have a monopoly of temper, is there, Mrs.
A nurseryman took my advice and came to settle in the place, and I preached wholesome doctrine to the poor concerning the planting of fruit trees, in order that some day they should obtain a monopoly of the sale of fruit in Grenoble.