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 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.

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

When regulators and economists evaluate whether a company constitutes an illegal monopoly, they often consider its overall market share or its relatively high price markups. This piece argues that the Olley-Pakes decomposition is a better measure, identifying whether customers within a market are switching to more productive companies.

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.

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.

Utility companies are often considered 'natural' monopolies, which occur in industries where the upfront costs of entering the market are high, making competition unrealistic.

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.

Modern examples of oligopolies include the airline industry

An oligopoly is a market structure dominated by a few key suppliers. In the US, as of 2021, just four airlines (Delta, United, Southwest, and American) controlled nearly two-thirds of all domestic flights, making the US airline industry one example of an oligopoly.

Robber barons, the monopolistic business people of the 19th century, explained

“Robber baron” was a term used to describe 19th-century businesspeople who engaged in monopolistic business practices and didn’t face much business regulation, resulting in significant wealth.

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.

Watch how American monopolies used vertical and horizontal integration strategies to command markets

Vertical integration occurs when a company controls the entire manufacturing or development process, whereas horizontal integration involves expanding a company's market share. Both strategies have been used by US monopolies to establish dominance in markets.

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.

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.

Patents arguably grant inventors monopolies for a short period of time

As a way to reward innovation, the government grants short-term monopolies on patented products. Patents block other companies from producing or selling that product, giving inventors the rights and opportunity to establish themselves in a market before other competitors enter.

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.

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

A 'position' in financial markets refers to the amount of a security or asset that an investor owns or sells short

A "long" position gains from an increase in a security's price, whereas a "short" position profits from a price drop. This article includes a detailed explanation of the term "position" as it relates to investing and financial markets.

Stock buybacks are when a company purchases some of its own shares of stock

This reduces the number of shares on the market and, therefore, makes the remaining shares more valuable. Buybacks have received a lot of criticism in recent years for many reasons, such as how they could artificially inflate share prices.

The 'dupe' economy is fueled by the youthful thrill of thrift

Historically, you don't want people to know you have a knock-off luxury item. But today's younger generations are embracing the "dupe" economy, an open celebration of luxury knock-off items where consumers are proud to pay less for something roughly equivalent to premium brand offerings.

A short squeeze happens when short sellers increase stock prices by buying shares back quickly

When short sellers realize their positions may be incorrect—usually triggered by increasing share prices—they often try to quickly buy back their shares in order to minimize their total losses. When this happens on a large scale, that buying activity can drastically increase to represent the seemingly high demand for that stock. The result is called a "short squeeze," which refers to short sellers literally being squeezed out of their positions by rising prices.

’Buy Nothing’ is a growing movement of hyperlocal gift economies with over 5 million global members

In anticonsumerist "Buy Nothing" groups, members can offer up or receive gifts, from plants to toys and more. Similar to Freecycle, the group emphasizes connection beyond just the material swapping as a means of creating community.

Concierge medicine practices typically have hundreds of patients, instead of thousands

A clinician describes how he's "one call away" from his patients in the concierge medicine system. His patients pay about $150 per month to be members in his practice on top of normal care visit costs. Doctors like him may only have hundreds of patients in their practice—instead of thousands.

Multilevel marketing companies are direct sales companies with a pyramid-shaped hierarchy resulting from recruitment, but they aren't legally considered pyramid schemes because revenue is driven by product sales rather than recruitment fees.

Spot markets are where commodities intended for relatively immediate delivery are traded

Spot markets are where physical securities are exchanged for cash. Also known as cash markets or physical markets, the trades are relatively immediate—both parties agree to an immediate transfer. Currencies and securities can also be traded on spot markets.

A centrally planned economy is one where the government—not markets—sets production

This Investopedia article explains how command economies work, which countries have used them, and why even market-based nations like the US sometimes adopt tools such as rationing or price controls during wartime or national emergencies.

Understanding how non-profit entities manage electric grids to ensure supply-demand balance

Independent System Operators in smaller areas and Regional Transmission Organizations that operate across multiple states run wholesale electricity markets. Electricity suppliers can submit competitive bids to meet estimated demand in day-ahead markets while keeping consumer costs low. ISOs and RCOs also inform markets of deviations in these estimates so that suppliers can adjust how much power they generate, which is then bought and sold in real time.

Explaining computer kernels and what makes monolithic kernels different from microkernels

A kernel is an intermediary piece of software on a device that manages the connection between software programs—the services and processes they perform to run correctly—and the available hardware resources, such as memory and computing bandwidth, including prioritizing resource allocation and managing access to specific hardware. A monolithic kernel manages all of an operating system's services, whereas a microkernel only handles essential services.

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.

Explore a list of well-known monopolies

Many American monopolies popped up during the rapid industrial growth of the Gilded Age. Industries like steel, tobacco, railroads, and telecommunication have all been monopolized at some point in history.

A 'unicorn' is a private company with a $1B-plus valuation

Just like a horse with a spiraling horn on its head, private companies with a more than $1B valuation are rare creatures. But unlike the mythical creature, this type of “unicorn” is occasionally spotted in the wild. Unicorn companies include SpaceX, OpenAI, Skims, and more.

'Buy one, get one free' is often a clever way to get you to spend more money

One Burger King diner recently saw the price of her $2.16 sandwich rise to $3.19 per sandwich when she used a buy-one-get-one-free (or BOGO) coupon. Naturally, she became suspicious about how good a deal BOGO really is. This video explains why BOGO deals are a way for companies to get you to spend more money, rather than less.

Read about different levels of price discrimination

Price discrimination is a business practice in which different customers are charged different prices for the same product or service. It's one way for a business to boost profits and take advantage of its market position. There are three levels of price discrimination, differentiated by the consumers targeted and the reasons for discrimination.

Falling demand and lower costs of production cause deflation

"Falling demand" refers to anything that changes someone's willingness to spend money on goods and services. Global recessions, fears of a worldwide recession, and a fall in the money supply are all factors that could lead to falling demand. Likewise, lower production costs allow companies to increase production, which can lead to a surplus in supply.

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.

'Buy one, get one free' is a clever way to get you to spend more money

One Burger King diner recently saw the price of her $2.16 sandwich rise to $3.19 per sandwich when she used a buy-one-get-one-free (or BOGO) coupon. Naturally, she became suspicious about how good a deal BOGO really is. This video explains why BOGO deals are a way for companies to get you to spend more money, rather than less.

Private credit is a nonbank loan made directly to a business

Similar to private equity, private credit is part of the private markets world. Both strategies offer illiquid, privately negotiated investments for privately held companies. Unlike private equity investors, however, private credit investors typically do not take ownership stakes in the companies they invest in.

The prices on prediction markets reflect how the collective forecasts future outcomes

On prediction markets, bettors bid up or down the price of contracts based on what they expect an event's outcome to be. Bettors bid up prices when they think an event is more likely to occur than the current contract price shows, so they buy the contracts, pushing the price higher. They bid down prices by selling these contracts when they believe an event is less likely to occur, driving the price down due to supply and demand.

Prediction markets have their own lingo that's an amalgamation of Gen Z and Gen Alpha slang

For instance, if you've been out-maneuvered by another trader, you've been "mogged." A "rulescuck" is someone who is a stickler for betting market rules and may try to win on a technicality.