What is it called when there is only one provider of a product or service?

A situation where there is only one provider of a product or service is referred to as a monopoly. In this market structure, the single seller holds significant control over pricing, supply, and market dynamics. Monopolies can arise due to various factors such as high barriers to entry for potential competitors, exclusive access to a resource, or government regulation granting a single entity the rights to provide a good or service.

This unique position allows the monopolist to dictate terms in the market, often leading to higher prices and reduced consumer choice compared to more competitive market structures. Understanding the implications of a monopoly is crucial because it can influence economic efficiency, consumer welfare, and regulatory responses, as monopolies may lead to market failures where the interests of consumers are not adequately represented.

In contrast, a monopsony describes a market with a single buyer rather than a seller. An oligopoly consists of a few sellers dominating the market, and perfect competition involves many sellers with no single entity able to influence the market price.