Economic Definition of factor market monopoly. Defined.
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Term factor market monopoly Definition: Monopoly market is characterized by a single firm selling a unique product with few if any close substitutes, in which competition is prevented by barriers to entry. These characteristics mean the monopoly firm is a price maker with complete market control. When monopoly is applied to a factor market, the only difference is that the good being sold is a factor of production rather than a traditional consumption good. However, the inefficiency found with monopoly rings just as strong with factor markets as with product markets. The price charged by a monopoly is higher and the quantity exchanged is less than would be had if the market were perfectly competitive.