There are three assumptions for a complete monopoly market:
First, there is only one manufacturer in the market that produces and sells goods;
Second, this manufacturer There are no close substitutes for the goods produced;
Third, it is extremely difficult or impossible for other manufacturers to enter the industry, so monopolies can control and manipulate market prices.
There are many reasons for the formation of a monopoly market. The most fundamental reason is to establish and maintain a legal or economic barrier. This prevents other companies from entering the market in order to consolidate the monopoly position of the monopoly company. As the only supplier in the market, a monopoly enterprise can easily control the quantity and market price of a certain product in the market, so that it can continuously obtain monopoly profits.
Extended information:
The opposite "perfect competition market":
There are many production and sales companies in an industry, and they all operate in the same way. A market that provides similar, standardized products (such as grain, cotton and other agricultural products) to the market. Neither sellers nor buyers have control over the price of goods or services.
In this competitive environment, since both buyers and sellers have no influence on prices and can only be price takers, any price increase or price reduction by the company will lead to a sudden drop in demand for the company's products or Unnecessary loss of profits. Therefore, product prices can only be determined by supply and demand.
Baidu Encyclopedia - Complete Monopoly Market
Baidu Encyclopedia - Perfect Competition Market