Legal monopoly definition
Types of legal monopolies
Government granted monopoly definition
Example of government granted monopoly
A monopoly refers to a company that has full control over a specific market. The term
itself is Greek in its origin where mono means “one” and polein means “to sell.” In this way, the
company is privileged in the sense that it has no competitors and can change the price of its
products according to its will. However, these companies are constrained by the purchasing
power of the public when it comes to setting prices. How a company obtains this position is
based on a few factors including regulations, economies of scale, patents, inputs, and lobbying.
The varying manners in which a company can become a monopoly dictates the kind of
monopoly that it will be defined as. A legal monopoly is just one type.
The idea of a monopoly presupposes that there is only one agent capable of developing
certain economic activities inherent in it. This is the case for all monopolies although different
types exist. These types include na…
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