Typically a monopoly refers to a persistent situation of a market where there is only one provider of a service or product. Monopolies are actually qualified by the economic competition lacking for the services or goods that they offer and also for the lack of executable substitute goods.
Monopoly can be considered to be the extreme case of capitalism. According to the beliefs of the economists, the system of monopoly doesn't work because when only a single firm offers a particular good or service, there is no competition in the market and there is no motivation felt to meet the requirements of the consumers.
Often the monopoly can be legal monopoly or government-granted monopoly that is sanctioned by the state. This is done in order to motivate the business for investing in the risky projects. The government sometimes goes for forming the government monopoly where it reserves the entire venture for itself. The governments set up these public monopolies in order to provide some essential services. This is also advocated that services of some basic utilities such as electricity and water should be offered by the public monopolies at a price that is affordable to everyone.
This is very often debated that if a monopoly is not secured from the restrictions by the government, it may be subjected to potential competition. There are also situations when the governments use antitrust laws in order to prevent the market ruled by monopolies. But there may result gray situations when the government needs to grant patents for new inventions. This makes that particular company to enjoy the monopoly for certain time period.
