What typically characterizes a monopoly in a market?

A monopoly is characterized by the presence of a single firm that dominates the entire market for a particular good or service. This singular control allows the monopolist to set prices higher than would be possible in a competitive market, where multiple firms would compete for customers, driving prices down. In a monopoly, because there are no direct competitors, the firm can exert significant influence over market conditions, including supply, pricing, and potentially even the availability of products.

The absence of competition means that consumers have fewer options, which can lead to reduced innovation and lower quality products over time. In contrast to scenarios involving multiple firms, a monopoly often results in less consumer choice and can prevent other firms from entering the market due to high barriers to entry established by the monopolist’s control. Thus, it is this dominance of the market by a single entity that fundamentally defines a monopoly.