A monopoly is a
market situation in which one firm has at least 25% control over
production and
pricing, and in which other firms are
prevented from
competing due to barriers of entry. The monopolist is therefore able to charge whatever
price it wishes and restrict its
output when
necessary. This behaviour
maximises profits for the
corporation, but is not in the interest of the
consumer.
In practice, it is very rare for a true monopoly situation to arise, as competition from alternative product often exists. If there is a near-monopoly situatuin, the government will often intervene and nationalize the firm.