The Unquestioned Monopoly

You are reading Economic Forces, a free weekly newsletter on economics, especially price theory, without the politics. You can support our newsletter by signing up here: We spend a lot of time at Economic Forces discussing monopoly. There is a lot to write about. For example, the concept of a monopoly seems easy enough to write about. A monopoly is a firm that is the only producer of a particular product. However, if you push on the definition of monopoly, things get a little murky. Does Coca-Cola have a monopoly? Well, yes they do. They are the only firm that produces Coca-Cola. The recipe is a secret. No one else can make Coca-Cola. But can we really say that Coca-Cola is a monopoly? Doesn’t the firm face competition from Pepsi? In fact, one might argue that Coca-Cola faces competition from any type of drink.