Monopolies (both actual and defacto) exist when one institution controls the access to something else, generally a commodity, information, or a service. In the absence of external controls, the institution can (and almost inevitably does) then set the price, determine the attributes of what they’re selling, and, even, who’s eligible to acquire what’s being sold. The key to the idea is control. A monopoly that is actually being regulated does not have the power that an unregulated one has, a power that is generally misused.
How it works
Monopoly's usually occur when a business or individual acquires a new resource that is in high demand, oil, lumber, computer software. Before government regulations, or public opinion can challenge the companies selling their product , the monopoly has already happened. After the Monopoly's have acquired a foot hold in the market place, they can continue their survival through buying out their competition. In most cases, it takes an act of the government to bust up the monopoly's in order to create a more balanced and competitive market.