A monopoly is a market where one seller supplies a product with no close substitute.
Because it faces no direct rival selling an equivalent product, a monopolist has market power. It can choose an output level and then charge the price consumers are willing to pay for that quantity, subject to demand and other constraints. Unlike a competitive firm, it is not simply a price taker.
Monopolies can arise from legal restrictions, control of an essential resource, patents, or economies of scale. A natural monopoly occurs when one large supplier can serve the market at lower cost than several smaller suppliers, often because infrastructure costs are substantial.
Monopoly is not the same as monopsony. A monopsony has one major buyer rather than one seller. Oligopoly describes a market dominated by a small number of sellers, while perfect competition assumes many buyers and sellers, standardized products, and easy entry and exit. Regulators may oversee monopolies to limit consumer harm.