How to Get an A* in A-Level Economics | What is a Monopoly?

Everyone wants a top grade, but not everyone is sure how. This series uses simple definitions and real-world examples to explain tough concepts. These examples are concise and memorable so that you won’t forget during your exams. You can find our full video series: 

A monopoly is a type of market structure, which in traditional economic theory has just one firm.

It is the least competitive market structure possible. There are two definitions of a monopoly.

The economic definition is: one firm in the market with 100% of the market share. This is the definition that we use in the A-Level syllabus. A real-life example of an economist’s definition of a monopoly is: TFL, London’s only transport provider. An economist’s monopoly is also known as a pure monopoly.

Pure monopoly TFL

 

The legal definition is: any firm with greater than 25% market share. These are known as legal monopolies.

Real life examples include British Gas and Tesco with 37% and 28% of their markets respectively.

Legal monopoly tesco


Subscribe to the Study Streak Blog for more