Monopoly is an economic situation in which only a single seller or producer supplies a commodity or a service. For a monopoly to be effective there must be no practical substitutes for the product or service sold, and no serious threat of the entry of a competitor into the market. This enables the seller to control the price.
One or more of the following elements are of great importance in establishing a monopoly in a particular industry:
(1) Control of a major resource necessary to produce a product, as was the case with bauxite in ...view middle of the document...
Economic monopolies have existed throughout much of human history. In ancient and medieval times dire scarcity of resources was common and affected the lives of most human beings. When resources are extremely scarce, little room exists for a multiplicity of producers for many products and services. The medieval guilds, for example, were associations of merchants or artisans that controlled output, set terms for entering a trade, and regulated p...
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...power and on the vigor with which administrations in power are willing to enforce antitrust laws. Both have varied widely over time. In general, U.S. efforts have been more successful in preventing the emergence of outright monopolies in many parts of the economy than in creating highly competitive markets in most industries.
Outside the U.S.—and especially in the United Kingdom and Western Europe—no comparable effort has been made to use government power to enforce competition and prevent the emergence of monopoly in industry. Historically, these nations have taken a more tolerant view of the legality of monopolistic arrangements and practices. Recently, however, some antitrust statutes have been enacted in the European Union nations.