Market concentration and high markups don't always signal a monopoly

An overview of monopolies, when one company controls an entire market

In the business world, a monopoly exists when one company controls the entire market. Regulators take issue with monopolies because they have been found to limit consumer choices, raise prices, and hurt competition.

Monopolies are considered the most extreme form of imperfect competition

True monopolistic companies face no competition, meaning there aren't any near substitutes for the goods or services the company provides. Often, no competition exists because the monopoly is either approved by the government or the barrier to entry is costly.

A 'bilateral monopoly' occurs when there's one supplier and one buyer in a market

Bilateral monopolies are often used to conceptualize labor markets in small towns. Using this concept, large employers have a monopoly over the labor market, while workers have a monopsony as the only available laborers.

An oligopoly is a market structure where a few large businesses dominate the entire market

When a few large companies dominate a market, changes in pricing for goods and services affect the entire market. Airlines are a common example of an oligopoly. Because the barrier to entry in the aviation industry is high, only a few airline companies offer the majority of the industry's services. While there is some competition, pricing across the board is largely intertwined and based on other companies' prices.

Read the Federal Trade Commission's legal definition of a monopoly

The Federal Trade Commission and the US Department of Justice (DOJ) Antitrust Division are the regulatory agencies responsible for overseeing antitrust laws. Before deeming any company a monopoly or acknowledging monopolistic power in a market, the FTC conducts thorough research into market competition, price, and even other competitors' business practices.

Network effects are the economic term for a good or service's popularity

When goods or services become especially popular, firms that provide that good or service become dominant in the market—which can ultimately lead to a monopoly.

Nvidia controls more than four-fifths of the GPU market—but isn't considered a monopoly

Semiconductor company Nvidia has a commanding market share when it comes to graphics processing units. Its competitors include Advanced Micro Devices and Intel, which together account for less than a fifth of the GPU market.

Private companies are often harder to value than public companies

That's partly because there isn't readily available stock information, and financial accounting is kept behind closed doors. Typically, determining the value of a private company involves, among other things, closely comparing the private company with its competitors.

Learn more about the four main market structures

In modern economic theory, there are four main market structures. Under each market structure, firms (or businesses) have differing levels of competition and reach different levels of price efficiency based on the consumer's willingness to pay for a product or service.

Smart pricing algorithms can unintentionally work together to raise prices

Researchers have found that, through trial and error, algorithms designed to adjust prices based on market data can learn to mimic price-fixing tactics, even without explicit programming to do so. Over time, they "learn" that it is more profitable to avoid price wars and keep prices high when competitors lower prices.

Legendary venture capitalist Peter Thiel once wrote that 'competition is for losers'

With Peter Thiel's "Monopoly Theory," the Founders Fund partner argued that investing in companies that create new categories, rather than those that compete with other businesses in existing ones, is a best practice in venture capital.

Monopoly was based on the satirical Landlord's Game, which criticized the abilities Monopoly rewarded.

What something costs is reflective of a balance in the market determined by the amount of demand relative to the supply of goods and services

Because economies are complex systems, a wide variety of issues influence this balance—including some things generally considered to be positive, like rising wages.

The dot-com stock bubble taught Howard Marks about markets

Annual investment letters from Howard Marks, the billionaire cofounder of top distressed debt shop Oaktree Capital Management, are required reading on Wall Street. The prolific writer and investor explains the distinction between the folly of trying to time the market and the necessity of paying attention to market cycles. The difference makes all the difference in returns.

Standard Oil's predatory business practices included temporarily operating at a loss to drive competitors out of business

Rockefeller's oil monopoly had a dark side, including cutting oil prices so low that Standard Oil was sometimes temporarily operating at a loss in order to drive competitors out of business.

American CEOs getting super rich has a lot to do with stock buybacks

In 1965, the pay gap between American CEOs and their workers was roughly 15-to-1. But by 2018, that ratio had ballooned to 220-to-1.

Explore the complex trade-offs policymakers face when considering tariffs

While tariffs can generate government revenue and encourage the consumption of locally produced goods, they can often lead to higher consumer prices and may negatively impact economic growth.

Critics argue the Dow no longer reflects the modern economy

With only 30 companies and a price-weighted formula, skeptics say the DJIA underrepresents vast sectors of the market. They claim it is outdated, though its close correlation with the broader S&P 500 keeps it relevant.

The Nasdaq's 'Magnificent 7' companies are responsible for roughly 40% of the Nasdaq 100 index's gains, while the remaining 93 companies account for the other 60%.

Some educators argue society's obsession with colleges at the top of rankings has hurt the US higher education ecosystem

Why are "good colleges" often the ones that accept the fewest students? Speaker Cecilia Orphan argues that society's obsession with colleges that are often private, expensive, and that reject applicants with high frequency has done harm. Instead, she argues, we should focus on regional public universities that meet the needs of students in a cost-achievable manner.

One writer suggests using the California roll to evaluate sushi restaurants

Christine Carone uses the logic of the Big Mac Index—a metric for evaluating purchasing power by comparing countries’ Big Mac prices proposed by the Economist—for evaluating takeout sushi. Her recommendation is looking at the cost of a California roll, a relatively inexpensive, middle-of-the-road item for any American sushi spot. If it’s too expensive, the restaurant isn’t offering good value. But if it’s too cheap, you should worry about the quality of the fish.

Product-market fit is achieved when a product strongly satisfies market demand

Some experts argue that product-market fit is what separates the most successful startups from those that never get off the ground. While there isn’t an official rule book for how to optimize and test product-market fit, the CEO of email startup Superhuman has attempted to provide one with a specific four-step process.

Governments are arguably very dependent on consulting firms like McKinsey and Deloitte

This podcast episode discusses the consultancy industry’s rise and how these firms make billions of dollars, even amid significant scandals.

The complicated economics of horse racing

The Triple Crown commands big ratings (and enormous amounts of money in betting) but the sport as a whole is in a precarious position, thanks to limited tracks and an overreliance on subsidies. This special from Freakonomics unpacks what all that means for the future of the sport.

Exclusionary ads can help win over customers, some marketers argue

Slogans like "if you don't like dark roast, this coffee isn't for you," also known as "dissuasive framing," can entice specific groups of customers, some marketers say. The shift comes from the perceived authenticity of a company admitting that a product is not perfect for everyone.

Commodity traders are the most powerful people you've never heard of

Just beneath the surface of the global economy is a hidden layer of dealmakers for whom war, chaos, and sanctions can be a great business opportunity—they're called commodity traders. Their power partly stems from the fact that commodities are essentially the building blocks of the economy at large.

Netflix profits when you're not watching, and its movies are designed that way—read a detail-rich critical essay exposing lesser-known Netflix takes

Art theft is the third-largest source of criminal revenues worldwide, thanks in part to the subjective nature of valuing a work of art.

The price of gas is a composite made up of several different factors, with the federal gas tax making up less than 20% of what drivers pay at the pump.

Gerrymandering works through two techniques: cracking opposing voters across districts to dilute their power, and packing them into a few to waste their votes in lopsided majorities.

An initial public offering or 'IPO' is the process of a private company becoming public by putting shares of the company on the stock market for purchase.

Warren Buffett's former professor Benjamin Graham is known as the 'father of value investing,' a strategy in which investors seek to buy stocks trading below their intrinsic worth.

How Amazon operates a 'flywheel' business model, a self-reinforcing cycle that drives continuous growth

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

The hormonal disorder PCOS was renamed PMOS in 2026, a move designed to improve care and research by shifting the focus to the hormonal causes of this condition that affects 1 in 8 women.

A Yale student wrote a profound essay about the consulting industry's influence on elite college students that was published in a book of her writing after she died in a post-graduation car accident.

Listen to an in-depth conversation on the links between Parkinson's disease and herbicide exposure and the challenging pace of scientific investigation.

Browse a detailed visual analysis of over 200,000 similes—comparisons that often use 'like' or 'as'—from popular fiction to see how frequently writers the same idiomatic expressions.

Memecoins are a type of cryptocurrency—a form of digital currency with a wide variety of uses—created around popular 'memes,' or viral internet jokes.

Up to a million Girl Scouts sell about 200 million cookie boxes every spring, generating $800 million, largely because refusing a child is frowned upon

Learn how monoclonal antibodies, which mimic the body's antibodies, can fight diseases like Ebola.

Domino's Pizza's 30-minute delivery guarantee was responsible for the chain's 1980s surge, but it was discontinued after the company was found liable for delivery driver accidents.

A pickleball's loud 'pop' sound can reach 120 decibels, which is equivalent to a hammer hitting a nail

Use this calculator to find the dollar value of your mental load, from meal planning to coordinating after-school care for your children.

The story of Dollree Mapp, whose legal challenge over her 1957 conviction for possessing "obscene material" led to a major strengthening of the Fourth Amendment

The United States is one of only around two dozen countries with a fully federal system of government, in which power is divided between national and state governments.

SpongeBob exemplifies Aristotle's philosophy for living well because he understands that happiness doesn't come from external factors like money, recognition, or power.

Mark Twain spent decades feuding with the US Postal Service, convinced its costs and regulations were bureaucratic overreach.

The Great Salt Lake's distinct dual coloration results from high-salinity organisms that only live in the northern portion and produce a purple protein.

Corals are themselves not coral reefs—the term refers to the tiny marine invertebrates that build the rigid reef.