What characterizes a monopoly?

A monopoly is characterized by a market structure where a single producer or firm has exclusive control over the supply of a good or service. This dominance allows the monopolist to set prices and output levels without the influence of competition, leading to a lack of choices for consumers. In a monopolistic market, barriers to entry are typically high, preventing other firms from entering the market and competing.

This distinct feature contrasts sharply with competitive markets where multiple firms operate, offering various substitutes and keeping prices in check due to competition. In a monopoly, the absence of competitors can lead to higher prices and reduced quantities available to consumers, compared to a more competitive market structure where choices and price competition benefit consumers.