Monopoly
Definition. A monopoly is a market structure in which a single firm is the sole supplier of a good or service that has no close substitutes, protected by high barriers to entry. The monopolist is a price maker, facing the entire downward sloping market demand curve.
A monopoly maximises profit where marginal revenue equals marginal cost, typically producing a lower output and charging a higher price than under perfect competition, which leads to allocative inefficiency and a deadweight loss.
This term belongs to Monopoly in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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