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# Monopoly of Trade

## Definition

Exclusive commercial privileges granted by government to particular groups, either domestic producers or colonial powers, that restrict competition and control market access. These monopolies artificially raise prices, reduce quality, and prevent the natural advantages of free trade from benefiting consumers and the broader economy.

## Source Chapter

Book IV, Chapter 8

## Context

Smith examines how monopolies operate both domestically (through corporations and guilds) and internationally (through colonial trade restrictions). He demonstrates how these artificial market structures benefit specific producer groups at the expense of consumers and the general welfare, contradicting the natural liberty of trade.

## Economic Domain

Regulation

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