Monopoly A company with a pure monopoly means that a company is the only seller in a market with no other close substitutes. For many years, Microsoft Corporation had a monopoly on the software and operating systems that are used in computers. Also, with pure monopolies, there are high barriers to entry, such as significant start-up costs preventing competitors from entering the market. •A monopoly refers to when a company and its product offerings dominate one sector or industry. •Monopolies can be considered an extreme result of free-market capitalism and are often used to describe an entity that has total or near-total control of a market. •Natural monopolies can exist when there are high barriers to entry; a company has a patent on their products or is allowed by governments to provide essential services. Understanding Monopolies Monopolies typically have an unfair advantage over their competition since they are either the only provider of a product or control most of the market share or customers for their product. Although monopolies might differ from industry-to-industry, they tend to share similar characteristics that include: •High or no barriers to entry
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