The four key characteristics of monopoly are:
(1) a single firm selling all output in a market
(2) a unique product
(3) restrictions on entry into the industry (barriers of entry)
(4) specialized information about production techniques unavailable to other potential producers.
1. A monopoly is a monopoly because it is the only seller in the market. The word "monopoly" translates to "one seller". As the one seller, the monopoly controls the supply side of the market COMPLETELY.
2. A monopoly achieves single-seller status because the good supplied is unique. There are no close substitutes available for the good produced by a monopoly.
3. Monopoly often maintains single seller status due to restrictions on the entry of other firms into the market.
Some of the key barriers to entry are: government license or franchise, resource ownership, patents and copyrights, high start-up cost, and decreasing average total cost .
4. A monopoly often recieves information not available to others. This specialized information comes in the form of legally-established patents, copyrights, or trademarks.
