monopoly

Where a single institution controls all of the supply for a good in a market. However, a monopoly cannot last in the long run, unless a barrier to entry exists in the market. Barriers to entry include: - control of natural resources or inputs - economies of scale - technological superiority - legal restrictions imposed by governments, including patents and copyrights. A monopolist maximizes profit by producing a little less than the market equilibrium, driving up the price of the good. This creates a deadweight loss to society, (some mutually beneficial transactions are forgone), which is why a monopoly is discouraged or illegal in many parts of the world.