The Concept of Geographic Monopoly

What is a Geographic Monopoly?

A monopoly which controls any market of goods.

A monopoly run by the government.

A monopoly centered around a limited natural resource.

A monopoly propped up by the government.


The first option: A monopoly which controls any market of goods.

A geographic monopoly occurs when a certain company holds the entire market for a certain service/product. This happens when the market is so limited that it doesn't make sense for anyone besides a single seller to enter the market (any additional people or companies wouldn't make much of a profit). An example of this could be anything from a shop in a small town, to cable companies and phone companies.


A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity. This contrasts with a monopsony which relates to a single entity's control of a market to purchase a good or service, and with oligopoly and duopoly which consists of a few sellers dominating a market. Monopolies are thus characterized by a lack of economic competition to produce the good or service, a lack of viable substitute goods, and the possibility of a high monopoly price well above the seller's marginal cost that leads to a high monopoly profit.

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