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The term monopoly (from Greek monos , alone or single + polein , to sell) can bear two main definitions:
In Economics, monopoly (also "Pure oligopoly") exists when a specific individual or enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it. [1] Monopolies are thus characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods. [2] Alternatively (a modern and less common usage), it may be used as a verb or adjective to refer to the process (see Monopolism) by which a firm gains persistently greater market share than what is expected under perfect competition. The latter usage of the term is invoked in the theory of monopolistic competition.
In political discourse, the term monopoly is frequently invoked as a blanket generalization in criticism of firms with large market share or lack of what's perceived as "fair" competition. [3]
The latter usage of the term is more predominant among non-economists than economists and while its assertions may hold true, it is not based upon the definition of "monopoly," used by economists.
A monopoly should be distinguished from monopsony, in which there is only one buyer of a product or service; a monopoly may also have monopsony control of a sector of a market. Likewise, a monopoly should be distinguished from a cartel (a form of oligopoly), in which several providers act together to coordinate services, prices or sale of goods.
A government-granted monopoly or legal monopoly is sanctioned by the state, often to provide an incentive to invest in a risky venture or enrich a dom ...