What Is a Monopoly? – Reading Comprehension for English Learners

When you hear the word monopoly, you might picture the famous board game — buying up properties and driving your friends broke!

But in real life, monopolies are serious business.

They affect what we buy, what we pay, and how much choice we really have.

So, what is a monopoly?

A monopoly happens when one company controls almost an entire market.

There’s little or no competition, and consumers have fewer choices. It’s a bit like one store in town selling all the food — and setting any price they want.

🚫 Why Monopolies Can Be a Problem

While it might sound like a business success story, monopolies often hurt everyday people. Here’s how:

• Higher Prices – With no competition, monopolies can charge whatever they like.

• Less Innovation – If you already own the market, why change or improve?

• Lower Quality – Monopolies may offer poor products because people have nowhere else to shop.

• Inefficiency – They often waste time and money because no one challenges them.

• Barriers for New Businesses – New companies can’t afford to compete.

• Fewer Consumer Choices – Customers are stuck with limited or outdated options.

• Political Influence – Some monopolies become so powerful they influence laws to protect themselves, not the public.

🧩 How Do Monopolies Form?

Monopolies don’t appear overnight. They often grow slowly and strategically, using a few common tactics:

• Buying out rivals – A big company purchases smaller competitors to remove threats.

• Undercutting prices – They temporarily lower prices so much that smaller companies can’t survive.

• Controlling key resources – If a business owns a rare material or critical tech, it can block access to others.

• Creating barriers – Legal rules, expensive tools, or industry control can make it almost impossible for newcomers to enter.

🕵️‍♂️ Real-World Monopoly Examples

🛢️ Standard Oil (USA)

In the 1800s, John D. Rockefeller’s Standard Oil controlled about 90% of America’s oil industry. It bought rivals, cut prices to kill competition, and controlled everything from drilling to delivery.

In 1911, the U.S. government broke it up into 34 smaller companies, including what became ExxonMobil and Chevron.

📞 AT&T (USA)

For most of the 20th century, AT&T was the only telephone provider in the U.S. They owned the lines, the tech, and the services. With no competitors, they had little reason to innovate or cut prices.

In 1982, the government stepped in and split AT&T into regional “Baby Bell” companies, allowing other providers to enter the market.

💻 Big Tech Today

Tech giants like Google, Amazon, Meta (Facebook), and Apple are being accused of forming modern monopolies.

• Google controls 90%+ of global search — critics say it blocks other search engines.

• Amazon allegedly uses seller data to create its own competing products.

• Facebook bought Instagram and WhatsApp — removing rivals.

Governments in the U.S. and Europe are now proposing new laws to regulate or break up Big Tech, just like Standard Oil and AT&T.

🧠 Vocabulary Builder

Nouns:

• Monopoly – One company dominates a market

• Competition – Rivalry between businesses

• Consumer – A person who buys something

• Barrier to entry – An obstacle that makes it hard to start a business

• Regulation – Government rules for businesses

• Innovation – A new idea or invention

• Inefficiency – Poor use of time or money

• Market share – A company’s percentage of total sales

• Backlash – Strong public criticism

• Exploitation – Unfair use for profit

Verbs & Phrases:

• Dominate – To control something

• Undercut – To sell at lower prices than competitors

• Outcompete – To win more customers than rivals

• Exploit – To use something unfairly for gain

💬 Idioms & Phrasal Verbs

• Corner the market – To control all sales of a product

• Call the shots – To make the key decisions

• Break up – To divide a company

• Crack down on – To punish or control something strictly

• Rake in – To earn large profits quickly

• Open the door (for) – To make something possible

• Squeeze out – To push competitors out of the market

• Save the cheddar – (slang) Save money

✅ Reading Comprehension Quiz

1️⃣ Which company controlled 90% of the U.S. oil market?
A) Amazon
B) AT&T
C) Standard Oil

2️⃣ What does “corner the market” mean?
A) Own a shop on the corner
B) Control all sales
C) Sell corners

3️⃣ What was a “Baby Bell”?
A) A tiny telephone
B) A toy
C) A smaller phone company created from AT&T

4️⃣ Why do governments break up monopolies?
A) To help big companies grow
B) To increase competition
C) To stop people working

✅ Reading Comprehension Quiz Answers

1️⃣ C) Standard Oil – It controlled 90% of the U.S. oil market in the late 1800s.
2️⃣ B) Control all sales – “Corner the market” means dominating all or most of the supply of a product or service.
3️⃣ C) A smaller phone company created from AT&T – After AT&T was broken up, smaller regional companies called “Baby Bells” were formed.
4️⃣ B) To increase competition – Governments break up monopolies to prevent one company from having total control, ensuring fair prices and innovation.

💬 Discussion Starters

• Should governments break up companies that become too powerful?

• Are today’s tech companies like Google and Amazon too big?

• Can you think of a monopoly in your country or region?

• Is it better to have lower prices with fewer choices, or more competition with some higher costs?

✨ Reflection

Monopolies remind us that too much power in too few hands often hurts everyday people. While some monopolies create convenience, many reduce innovation, limit freedom of choice, and exploit their position. It’s important for citizens and governments to stay alert — because fair markets need balance, not dominance.

Whether it's oil, phones, or tech, when one player calls all the shots, the rest of us often pay more and get less.

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