Final answer:
Monopoly is a situation where a single entity dominates a market, controlling prices and supply. Monopoly power enables firms to act as price setters, impacting markets and historical events. Factors like control over resources and economies of scale contribute to monopoly power.
Explanation:
Monopoly is a situation where one party or company exclusively provides a product or service, dominating the market and exerting powerful control over it. This control can be due to factors like control over natural resources critical for production or economies of scale.
Monopoly power allows a firm to set prices independently, making it a price setter. Sources of monopoly power include economies of scale, ownership of key inputs, patents, and government restrictions.
Having monopoly power can lead to unintended consequences, influencing the market and even historical events, as seen with tea and cotton monopolies in U.S. history.
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