<!-- generated: provider=openrouter model=arcee-ai/trinity-large-preview:free date=2026-02-19 source=book-4-chapter-02 -->

# Monopoly Effects on Prices

## Definition

The economic consequences of market control by domestic producers, including higher prices for consumers and reduced incentives for efficiency improvements. Monopolies created through import restrictions prevent competition that would normally drive prices down and quality up.

## Source Chapter

Book IV, Chapter 2

## Context

Smith examines how monopolies secured through import restraints affect market prices and consumer welfare. He argues that while producers benefit from monopoly power, society as a whole suffers from higher prices and reduced economic efficiency.

## Economic Domain

Distribution

---
