ABSTRACT
A monopoly is a market structure with a single producer, so effectively the firm is the industry. There are many examples of monopolies. Bell Telephone had a monopoly in providing telecommunication services until it was split up in 1984. The Mac operating system is sold exclusively by Apple, just as the Windows operating system is sold exclusively by Microsoft. Monsanto is the only company that makes a genetically modified cotton seed which is worm-resistant. Even though a monopoly appears to have an extra degree of freedom over a competitive firm because it can set both the price and the quantity, this freedom is somewhat illusory. This is because the market demand curve curbs its ability to choose an arbitrary quantity-price combination. Setting the price determines how much the monopoly can sell, and therefore, how much it should produce; setting a quantity determines the maximum price that the monopoly can sell that quantity for.
