Final answer:
A monopoly is a market structure where one firm has exclusive control over a product or service, potentially affecting prices. An oligopoly consists of a few dominant firms with significant market power that can collectively impact the market. Both structures can restrict competition and influence market conditions.
Step-by-step explanation:
The terms monopoly and oligopoly refer to different market structures in economics. A monopoly exists when a single firm has exclusive control over a commodity or service in a particular market, such as the case with public water utilities or Microsoft's dominance in the operating systems market. This enables the monopolist to potentially manipulate prices due to the lack of competition.
An oligopoly, on the other hand, occurs when a few large, powerful firms dominate an industry, each with significant market power. These firms, which might produce items like automobiles or soft drinks, can collectively influence the market much like a single monopoly by restricting trade practices to raise prices and decrease output. The behavior of firms in an oligopoly is interdependent, as the actions of one firm affect the others, especially in a scenario like a duopoly where firms may vary in size.