Monopolistic Market


DEFINITION of 'Monopolistic Market'

A type of market that features one, if not all, of the traits of a monopoly such as high price levels, supply constraints, or excessive barriers to entry. Because this type of market would be comprised of one supplying firm, consumers would have no choice but to purchase solely from this firm. Without proper legislation or controls, this firm possesses the power to raise prices without adversely affecting demand for its products/services. This type of market stands in contrast to a perfectly competitive market.


Loading the player...

BREAKING DOWN 'Monopolistic Market'

A monopolistic market favors companies to the detriment of consumers. The market, in this case, is usually defined as a stock market sector such as telecommunications or media firms, where this type of market behavior is likely to be found.

There are several groups and trade organizations, such as the FCC, WTO and EU governing council, that ensure that monopolistic markets do not form and also create legal ramifications for companies that pursue market-cornering policies. The Microsoft antitrust trials of the late '90s show that the markets are still fighting against monopolistic behavior, even today.

  1. Buyer's Monopoly

    A buyer's monopoly, or "monopsony", is a market situation where ...
  2. World Trade Organization - WTO

    An international organization dealing with the global rules of ...
  3. Antitrust

    The antitrust laws apply to virtually all industries and to every ...
  4. Demand

    An economic principle that describes a consumer's desire and ...
  5. Economic Moat

    The competitive advantage that one company has over other companies ...
  6. Monopoly

    A situation in which a single company or group owns all or nearly ...
Related Articles
  1. Investing

    What's a Monopolistic Market?

    A monopolistic market has a significant number of characteristics of a pure monopoly. Though there may be more than one supplier, the market has high prices, suppliers tightly control availability ...
  2. Economics

    Economics Basics

    Learn economics principles such as the relationship of supply and demand, elasticity, utility, and more!
  3. Trading Strategies

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

    Learn how the economic term "price taker" may separate investors from traders.
  4. Personal Finance

    Antitrust Defined

    Check out the history and reasons behind antitrust laws, as well as the arguments over them.
  5. Stock Analysis

    If You Had Invested Right After Gilead's IPO

    Find out the present day value of your investment in Gilead Sciences and the amount of shares you would own if you had invested during its IPO.
  6. Stock Analysis

    If You Had Invested Right After Costco's IPO

    Find out how much your investment would be worth if you had invested $1,000 during Costco's IPO and how much you would have received in dividends.
  7. Investing

    In Search of the Rate-Proof Portfolio

    After October’s better-than-expected employment report, a December Federal Reserve (Fed) liftoff is looking more likely than it was earlier this fall.
  8. Investing

    Time to Bring Active Back into a Portfolio?

    While stocks have rallied since the economic recovery in 2009, many active portfolio managers have struggled to deliver investor returns in excess.
  9. Investing Basics

    Why Interest Rates Affect Everyone

    Learn why interest rates are one of the most important economic variables and how every individual and business is affected by rate changes.
  10. Investing

    Where the Price is Right for Dividends

    There are two broad schools of thought for equity income investing: The first pays the highest dividend yields and the second focuses on healthy yields.
  1. How is profit maximized in a monopolistic market?

    In a monopolistic market, there is only one firm that produces a product. There is absolute product differentiation because ... Read Full Answer >>
  2. What are the characteristics of a monopolistic market?

    A monopolistic market is a market structure that has the characteristics of a pure monopoly. A monopoly exists when there ... Read Full Answer >>
  3. What is the difference between a monopolistic market and perfect competition?

    A monopolistic market and a perfectly competitive market are two market structures that have several key distinctions, such ... Read Full Answer >>
  4. What is the difference between a monopolistic market and monopolistic competition?

    A monopolistic market is an economic market structure that exists when there is only one supplier of a particular good or ... Read Full Answer >>
  5. How do you make working capital adjustments in transfer pricing?

    Transfer pricing refers to prices that a multinational company or group charges a second party operating in a different tax ... Read Full Answer >>
  6. Where do penny stocks trade?

    Generally, penny stocks are traded through the use of the Over the Counter Bulletin Board (OTCBB) and through pink sheets. ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Bar Chart

    A style of chart used by some technical analysts, on which, as illustrated below, the top of the vertical line indicates ...
  2. Bullish Engulfing Pattern

    A chart pattern that forms when a small black candlestick is followed by a large white candlestick that completely eclipses ...
  3. Cyber Monday

    An expression used in online retailing to describe the Monday following U.S. Thanksgiving weekend. Cyber Monday is generally ...
  4. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
Trading Center