Term:MONOPOLY

The situation where one business controls enough of the supply of a product or service to be able to force the price up by being the only supplier. A good example of this is De Beers, which has a virtual monopoly in the diamond market. Monopolies are discouraged in most western capitalist countries because they tend to lead to artificially high prices and inferior products. In the USA anti-trust legislation attempts to prevent monopolistic mergers and take-overs.

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