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A monopoly is a market structure in which there is only one producer or seller of a product.

A monopoly is a market structure in which there is only one producer or seller of a product. In other words, the single business is the industry. Entry into such a market is restricted due to high costs or other impediments, which may be economic, social, or political.

For instance, a government can create a monopoly over an industry that it wants to control such as electricity. Another reason for the barriers against entry into a monopolistic industry is that oftentimes one entity has the exclusive rights to a natural resource. Monopolies can be established by a government formed naturally or formed by integration. For example, in Saudi Arabia, the government has sole control over the oil industry.

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Fundamentals of Economics

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