An [economic]( monopoly refers to a market structure where a single company or entity dominates a sector or industry to the extent that it can control the price of goods or services. This happens due to the lack of competition. Here are some key characteristics of a monopoly: 1. **Single Seller**: In a monopoly, there is one firm or entity which provides all the goods or services in a particular market. There are no close substitutes for the goods or services the monopoly sells. 2. **Price Maker**: Since there is no competition, the monopolist can influence the market price. It can choose to produce less to increase the price, or produce more to decrease the price. However, they still have to consider demand – if they price too high, demand might decrease too much. 3. **High Barriers to Entry**: Monopolies often exist because there are high barriers to entry in the market. These barriers could be due to high costs, regulations, or control over a key resource. This prevents other firms from entering the market and providing competition. 4. **Economies of Scale**: Many monopolies exist in industries where high initial investments are required but the cost of producing additional units is relatively low. This allows the monopolist to benefit from economies of scale and produce at a lower average cost than any potential competitor. 5. **Profit Maximization**: Like other firms, monopolies aim to maximize their profits. They will produce up to the point where their marginal cost equals their marginal revenue. It's worth noting that monopolies can lead to inefficiencies and [inequality]( in [[free markets]]. They can result in higher prices and lower output than in more competitive markets, potentially harming consumers. Therefore, many countries regulate monopolies or take measures to prevent their formation. See also: [[negative externalities]], [[too big to fail]]