Final answer:
Monopolies are characterized by a single seller with substantial market power.
Step-by-step explanation:
Monopolies are market structures characterized by a single seller dominating the market with considerable control over the product's price and supply. Among types of monopolies, natural monopoly is distinguished by economies of scale making a single provider more efficient than multiple competing ones, often found in utilities like water and electricity. In contrast, legal monopoly arises from laws or regulations granting exclusive rights, like patents or government licenses, safeguarding certain products or services from competition. While not explicitly mentioned in the prompts, technological monopoly exists when a company controls a technology vitally essential to a product or service and geographical monopoly occurs when a company is the sole provider in a geographic area with no close substitutes.
Natural monopolies develop often due to high infrastructure costs, making it impractical for new entrants to compete, as seen in railway or electricity sectors. Legal monopolies promote innovation through trademarks and patents, though they can sometimes lead to predatory pricing, where a dominating firm sets prices low to eliminate competition. Predatory pricing is an anti-competitive tactic scrutinized by anti-monopoly legislation.