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Related to monopolistically: Nash equilibrium, oligopoly


(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.


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).


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.


1. exclusive control of the market supply of a product or service
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


™ 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
References in periodicals archive ?
In effect, this implies either competitive or monopolistically competitive market conditions (firms may differentiate products, but on average, products are priced at their long-run average cost).
We assume a continuum of monopolistically competitive firms producing differentiated intermediate goods.
We assume that output of a representative monopolistically competitive firm is linear in labor, [y.sub.t] = [A.sub.t][n.sub.t], and that each firm faces a downward-sloping demand function for the product variety it produces, [y.sub.t] = [([p.sub.t]/[[bar.p].sub.t]).sup.-[epsilon]][Y.sub.t], where [Y.sub.t] is aggregate demand, and [[bar.p].sub.t] is the aggregate price level, both taken as given by the firm; [epsilon] > 1 is the elasticity of substitution between competing varieties, and Pt is the individual firm's price.
Households supply differentiated labor services to the firms in a monopolistically competitive labor market.
monopolistically exporting kerosene to Europe and even Russia for years
We found profitability was positive for all the models, indicating that banks were able to achieve high records of profitability in monopolistically competitive markets.
As such, Isla had to differentiate itself from its competitors by focusing on its better quality products and customer service, which is tantamount to transforming itself to a monopolistically competitive firm.
The intermediate sector is composed of monopolistically competitive firms that produce intermediate products from rented capital input using the designs licensed from the household sector.
Nowadays, inflation is often modelled using the New Keynesian Phillips curve, which is explicitly based on microfoundations, monopolistically competitive firms and sticky prices.
In their view, the availability of trademark protection in the post-patent period reduces an investor's incentive to price monopolistically during the patent period, decreasing deadweight loss attributable to patent protection.
The production side consists of two sectors: the monopolistically competitive intermediate-goods sector and the perfectly competitive final-goods sector.
These characteristics lead inevitably to the downward-sloping average cost curves and other features characteristic of monopolistically competitive markets.