What defines a monopoly in the market?

A monopoly is defined as a market structure where a single producer or seller controls the entire supply of a good or service, making it the sole supplier in that market. This dominance enables the monopoly to have significant market power, allowing it to set prices and influence availability without direct competition from other firms.

The presence of a sole producer results in a lack of competition, which can lead to higher prices and reduced choices for consumers, as the monopoly can determine production levels and pricing strategies independently. This characteristic is distinct from scenarios where multiple firms compete for market share, which typically leads to competitive pricing and more options for consumers. Additionally, a monopoly does not arise in situations with a large number of competitors, nor is it necessarily related to government control unless the government specifically grants a monopoly or operates the service itself.