In economics, a market structure with one seller and significant barriers to entry is a monopoly.
A monopolist is the sole supplier of a product or service with no close substitute in the relevant market. Barriers to entry can include legal protections, control of an essential resource, large economies of scale, network effects, or high startup costs. These barriers help the existing firm maintain market power.
Unlike a perfectly competitive firm, a monopoly faces the market demand curve and can influence price by choosing its output. In the standard model, it maximizes profit by producing where marginal revenue equals marginal cost, then charging the price consumers will pay for that quantity on the demand curve. This typically means a higher price and lower output than under competition.
Natural monopolies can arise when one firm can supply the market at lower average cost than multiple firms, often because infrastructure costs are large. Governments may regulate such firms, operate them publicly, or use competition policy to limit harmful conduct.