Expanding on Leo's correct answer, fundamentally single mode and multimode fiber use different types of light sources to transmit the signal.
Single mode fiber requires a coherent light source - i.e., one that is transmitting a a single frequency. This is most commonly done using a laser as the source. So a -SM transceiver actually has a tiny laser built into it. That is a more precision device and accordingly has a higher cost.
Multimode fiber typically uses an LED-based source. LEDs do not provide light at a single frequency but rather multiple frequencies (known as ïncoherent or "multimode"). Typically in data communications the MM light is characterized as being grouped around a certain nominal wavelength (1300 nm the 100BaseFX used most commonly for Ethernet applications although variants use other nominal wavelengths).
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