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Monopoly

A monopoly exists when a single company or entity has exclusive control over a particular product, service, or market, preventing any significant competition. Monopolies can result from various factors, such as government regulations, patents, or natural market conditions. In a monopoly, the company can set prices without competition, often leading to higher prices and reduced innovation. Governments may regulate or break up monopolies to promote competition.

Example

A government grants a company exclusive rights to produce and sell electricity in a region, creating a monopoly in the energy market.

Key points

• Occurs when a single company controls a market or product with little to no competition.

• Monopolies can lead to higher prices and reduced innovation.

• Governments may intervene to regulate or break up monopolies to ensure fair competition.

Quick Answers to Curious Questions

A monopoly exists when a single company or entity has exclusive control over a market, with little or no competition.

Without competition, monopolies can set prices without market constraints, often leading to higher prices for consumers.

Governments may regulate or break up monopolies to promote competition and protect consumers from exploitation.

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