Legal Monopoly

AAA

DEFINITION of 'Legal Monopoly'

A company that is operating as a monopoly under a government mandate. A legal monopoly offers a specific product or service at a regulated price and can either be independently run and government regulated, or government run and regulated.

Also known as a "statutory monopoly".

INVESTOPEDIA EXPLAINS 'Legal Monopoly'

A legal monopoly is set up in the beginning as a perceived best option for both government and its citizens. For example, AT&T operated as a legal monopoly until 1982 because it was deemed vital to have cheap and reliable service for everyone. Railroads and airlines have also been operated as legal monopolies at different periods in history. In most cases, capitalism has won out over legal monopolies as technology and the economy have become more advanced..

RELATED TERMS
  1. Franchised Monopoly

    Monopoly status given by the government to a company. A franchised ...
  2. Monopolistic State Fund

    A government owned and operated fund that is set up to provide ...
  3. Renationalization

    Bringing assets and/or industries back into national-government ...
  4. Monopolistic Competition

    A type of competition within an industry where: 1. All firms ...
  5. Barriers To Entry

    The existence of high start-up costs or other obstacles that ...
  6. Bilateral Monopoly

    A market that has only one supplier and one buyer. The one supplier ...
Related Articles
  1. Setting Vs. Getting: What Is A Price-Taker?
    Trading Strategies

    Setting Vs. Getting: What Is A Price-Taker?

  2. Antitrust Defined
    Personal Finance

    Antitrust Defined

  3. Economics Basics
    Economics

    Economics Basics

  4. What Is Opportunity Cost And Why Does ...
    Economics

    What Is Opportunity Cost And Why Does ...

comments powered by Disqus
Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  3. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  4. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center