Monopoly

Monopoly is a market structure where there is only one seller of a product or several products that do not have good substitutes and many buyers.

A monopoly arises because there are barriers to entry in to the market. Entry barriers that can create monopolies are legal barriers, patents, economies of scale and high establishment costs.

A monopoly has the entire market demand and can affect production volumes and prices. A market with a monopoly have higher prices than a market where perfect competition prevails.