Say there's several people manufacturing playing cards. As King, I pick my favorite such printer, and create a law saying only he can make playing cards. His competition is out of a job, and with no competition, he can double his prices and still sell more units. Being grateful, he gives the King a cut of his new business. The king, and the merchant or nobleman who gained the monopoly, both stand to make a significant profit for a very minimal investment of effort.
Titles (such as Duke, Marquis, etc) often come with attached real estate and/or monopolies. Such monopolies were given as rewards to influential families and the king's allies, but in some eras (and kingdoms) a monopoly could be bought with bribes to the King. Often times such monopolies were granted just for certain territories, or for very narrow sub-industries, so that the King could give out more monopolies and not offend other merchants.
Guild priviledges would normally include a collective monopoly on their craft or trade within the area that the guild represented and this too required a payment to the Crown - usually an annual relief.
Such monopolies have the natural effect of concentrating the wealth in a few hands. This can strengthen the monarchy, and may eventually lead to other developments such a money based upon the King's Imprimatur. The Colonial Economy is based upon a specialized form of Monopoly by Royal Decree.
The specific case of the playing cards, by the way, was the foundation of the current battle over copyright law, which has been raging every since the 17th Century, at least. It was also one of the many factors that contributed to the English Civil War.
Game and Story Use
- Here's an exotic form of treasure or reward - have the NPC Monarch give the PCs a monopoly on something. This can be a manufacturing or trading monopoly, but in a fantasy world it could be more exotic.
- Some family or lordship holds the exclusive monopoly on adventuring and dungeon-delving. Anyone else may take up arms against a monster that is raiding their territory, but they cannot enter a dungeon without royal sponsorship. The PCs are either the royal exterminators who hold this monopoly, or perhaps a form of social bandit who rob the monsters (and monopoly holder) to give to the poor.
- As a bit of characterization amongst nobility, you could give each nobleman or family a different monopoly that they control.