Degree of Monopoly

Abstract

If the term ‘monopoly’ is taken in its literal meaning, then there is no room for such a thing as a ‘degree of monopoly’. For ‘monopoly’ means – taking into account the Greek origins of the term – a single seller; and there cannot be any ‘degrees’ of singleness. In fact, all through the 19th and well into the 20th century, economic thinking tended to look at monopoly in this way. Monopoly referred to the market form with a single seller as opposed to Competition, where several firms appear on the market. When the two market forms and their consequences were analysed it was soon realized that the two types were not quite sufficient to cover all decisive elements, and some in-between forms were taken into account as, for instance, in Cournot’s duopoly analysis or in Marshall’s insights into imperfect competition. But all the time monopoly remained more or less unscathed as a clearly defined juxtaposition to competitive market forms.

This chapter was originally published in The New Palgrave: A Dictionary of Economics, 1st edition, 1987. Edited by John Eatwell, Murray Milgate and Peter Newman