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There is important information for one to remember when considering the monopoly model diagram (and its associated conclusions) displayed here. The result that monopoly prices are higher, and production output lesser, than a competitive company follow from a requirement that the monopoly not charge different prices for different customers. That is, the monopoly is restricted from engaging in [[price discrimination]] (this is termed [[first degree price discrimination]], such that all customers are charged the same amount). If the monopoly were permitted to charge individualised prices (this is termed [[third degree price discrimination]]), the quantity produced, and the price charged to the ''marginal'' customer, would be identical to that of a competitive company, thus eliminating the [[deadweight loss]]; however, all [[gains from trade]] (social welfare) would accrue to the monopolist and none to the consumer. In essence, every consumer would be indifferent between going completely without the product or service and being able to purchase it from the monopolist.{{citation needed|date=June 2012}}
As long as the [[price elasticity of demand]] for most customers is less than one in [[absolute value]], it is advantageous for a company to increase its prices: it receives more money for fewer goods. With a price increase, price elasticity tends to increase, and in the optimum case above it will be greater than one for most customers.<ref>{{
A company maximizes profit by selling where marginal revenue equals marginal cost. A company that does not engage in price discrimination will charge the profit maximizing price, <math>P^*</math>, to all its customers. In such circumstances there are customers who would be willing to pay a higher price than <math>P^*</math> and those who will not pay <math>P^*</math> but would buy at a lower price. A price discrimination strategy is to charge less price sensitive buyers a higher price and the more price sensitive buyers a lower price.<ref>Samuelson and Marks (2006), p. 107.</ref> Thus additional revenue is generated from two sources. The basic problem is to identify customers by their willingness to pay.
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{{Unreferenced section|date=June 2017}}
{{Main|Competition law}}
In an unregulated market, monopolies can potentially be ended by new competition, breakaway businesses, or consumers seeking alternatives. In a regulated market, a government will often either regulate the monopoly, convert it into a publicly owned monopoly environment, or forcibly fragment it (see [[Antitrust]] law and trust busting). [[Public utility|Public utilities]], often being naturally efficient with only one operator and therefore less susceptible to efficient breakup, are often strongly regulated or publicly owned. [[American Telephone & Telegraph]] (AT&T) and [[Standard Oil]] are often cited as examples of the breakup of a private monopoly by government. The [[Bell System]], later AT&T, was protected from competition first by the [[Kingsbury Commitment]], and later by a series of agreements between AT&T and the Federal Government. In 1984, decades after having been granted monopoly power by force of law, AT&T was broken up into various components, [[MCI Communications|MCI]], [[Sprint Corporation|Sprint]], who were able to compete effectively in the long-distance phone market. These breakups are due to the presence of deadweight loss and inefficiency in a monopolistic market, causing the Government to intervene on behalf of consumers and society in order to incite competition. {{citation needed|date=June 2012}} While the sentiment among regulators and judges has generally
== Law ==
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{{Main|Competition law}}
[[File:"Blasts" from The Ram's Horn (1902) (14804351643).jpg|thumb|right|A 1902 anti-monopoly cartoon depicts the challenges that monopolies may create for workers.]]
The law regulating dominance in the European Union is governed by Article 102 of the ''[[Treaty on the Functioning of the European Union]]'' which aims at enhancing the consumer's welfare and also the efficiency of allocation of resources by protecting competition on the downstream market.<ref>DG Competition, ''DG Competition discussion paper on the application of Article [102] of the Treaty to exclusionary abuses'' [2005] [http://ec.europa.eu/competition/antitrust/art82/discpaper2005.pdf PDF]. {{Webarchive|url=https://web.archive.org/web/20180508145349/http://ec.europa.eu/competition/antitrust/art82/discpaper2005.pdf |date=8 May 2018 }}. accessed 4 May 2018.</ref> The existence of a very high market share does not always mean consumers are paying excessive prices, since the threat of new entrants to the market can restrain a high-market-share
=== Establishing dominance ===
First, it is necessary to determine whether a company is dominant, or whether it behaves
==== Relevant product market ====
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==== Persian filoselle (raw silk) ====
In the 17th century, Shah Abbas established New Julfa (a suburb in the capital of Isfahan) to concentrate [[Armenia]]n financial capital in Iran. Accordingly, he gave [[Armenia]]ns various privileges, including the monopoly to trade Persian filoselle (raw silk). Armenians exported it all over the world, including Asia, Europe, and America. By the 1750s, Armenia already controlled 75% of the total silk trade in the area. This resulted in a boom in Armenian commerce, which lasted for the next 150 years.<ref>{{Cite journal|last=Bakhchinyan|first=Artsvi|date=2017|title=The Activity of Armenian Merchants in International Trade|url=https://src-h.slav.hokudai.ac.jp/rp/publications/no14/14-03_Bakhchinyan.pdf|journal=|pages=24}}</ref>{{Better source needed|reason=The current source is insufficiently reliable ([[WP:NOTRS]]).|date=September 2023}} At present, as it happens, Armenia's own economy is itself highly monopolized; in fact, with 19% of its economy monopolized, Armenia was the most monopolized country in Eastern Europe and Central Asia in 2009.
==== Petroleum ====
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