A monopoly is a firm that is the sole seller of a good or a service in a market. This absence of competition allows the monopoly freely to set its price in such a way as to extract a maximum profit from its sales. Becoming a monopoly constitutes the ideal situation for any profit-maximizing enterprise.

The welfare implications of monopolies diverge according to the time horizon considered. In the short run, monopoly-pricing power is incontestably harmful to consumers. In the long run, and under certain conditions, monopolies can be socially beneficial because of their propensity to innovate.

The existence of monopolies poses difficult problems of regulation for authorities. Lawmakers must encourage some monopolies, restrict the market power of others, and simply outlaw still others. The globalization ...

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