A market where only one seller supplies a specific good or service, and thus has a full control over the price and supply level of the good or service in question.
The assumption in monopoly is that there are no substitutes and the firm is thus a price-maker. The firm may be motivated by profit maximization, and restrictive barriers to entry of the market prevent competition. Output is set at the point at which marginal revenue equals marginal cost.
In a monopoly market, competition does not exist.
Critics of this system argue that prices are far higher and output much lower than under other forms of competition. As a result, legislation has been introduced to restrict the power of monopolies.
Also See:· anti-trust laws