A monopoly occurs when a single company that produces a product or service controls the market with no close substitute.
A monopoly, as defined by Irving Fisher, is a market with "no competition," resulting in a situation in which a specific individual or organization is the exclusive supply of a specific thing.
To protect consumers' interests, the government may desire to regulate monopolies. Monopolies, for example, have the market power to establish prices that are greater than in competitive marketplaces. Price capping - limiting price rises - is one way the government can regulate monopolies.
The loss in Static Efficiency is the cost of a monopoly. In comparison to a competitive market, a monopoly generates a Deadweight Loss, which is the value of trades that are not executed. As shown below, the reduction in consumer excess exceeds the gain in producer surplus.
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