|
|
Article: Monopoly
- Article from:
- Gale Encyclopedia of U.S. Economic History
CopyrightCOPYRIGHT 2000 The Gale Group Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
|
MONOPOLY
Monopoly is a market or industry controlled entirely by one seller or firm that produces a product for which no close substitutes exist. The monopolist sets the price of its product and generally produces just enough to ensure plump profits. Although prices are normally higher than in a competitive market, monopolies are still disciplined by market forces. It does not benefit the monopolist to raise the price so high that no one can purchase it or to produce a product that is not in demand. A pure monopolist will examine the different prices and quantities it can sell in terms of the corresponding production costs incurred. Whatever price-quantity combination yields the highest ...