This lesson is intended to help you develop an understanding of economic monopolies. You will also consider the ways in which today’s technological infrastructure has influenced the capacity of companies to establish themselves as monopolies.
A monopoly is a market structure in which there is a single supplier of a good or service. A firm that is the single supplier of a good or service for which there are no close substitutes is also called a monopoly or a monopolist. For example, if only one company produced and sold computers the company would have a monopoly on computers. When only one firm provides a good or service, there is no competition to force the firm to produce the highest quality good or service or to sell it at the lowest possible cost. When a true monopoly exists, consumers cannot even buy substitute goods or services because nobody sells them. Certainly, businesses have the potential to profit greatly if they can become monopolies. However, many economists do not believe that monopolies are good for the economy, and the U.S. government has outlawed monopolies.
In this lesson, we will look as Facebook as an example.
You will be able to…