Monopoly is a market structure which has a single seller who merchandises a particular
unique commodity in the market. The level of competition is diminished as the seller is the only
supplier of the commodity. The commodity usually lacks substitution, and thus, no competition
is experienced by the seller. Remarkably, monopoly is characterized by different factors
including patent, copyright, and ownership of the resources, government license as well as a
highly cost while starting a monopoly business. The above characteristics thus make the business
person who is operating a monopoly business to establish prices and also control the market.
There are different types of monopoly including the natural monopoly, technological
monopoly, geographical monopoly and government monopoly. In the natural monopoly, the
costs are reduced by having one supplier of a given product. A natural monopoly occurs where
there are many factors which make competition unworkable. More so, a natural monopoly is also
experienced in financially infeasible situations. The local telephone carriers are a great example
of natural monopoly where the infrastructure required in creating wireless connections becomes
too expensive for the customers (Foster, 2014).
In a technological monopoly, exists under the rules that a business requires copyright or
patent for the operations to be initiated and continued. As such, the technological monopoly is as
a result of legal protection. For instance, in an electronic business where a patent and or
copyright has been issued, the business prevents its competitors from supplying the same goods
at different prices. Pharmaceuticals are also examples of technological monopoly as the products
precise components making it hard and expensive for the competitors to create similar
commodities (Foster, 2014).