1. Monopolies have market power that allows them to raise prices without losing all demand. Barriers to entry like large capital requirements, patents, and government franchises prevent competition against monopolies. 2. A pure monopoly is a single firm with no close substitutes and significant barriers to entry. It faces the market demand curve and sets both price and quantity to maximize profits where marginal revenue equals marginal cost. 3. Monopolies restrict output and raise prices above marginal cost, leading to inefficient allocation of resources. Antitrust policy aims to remedy monopolies through legislation like the Sherman Act and agencies that enforce antitrust laws.