Monopoly is the the exclusive possession or control of the supply or trade in a commodity or service. A monopoly has many disadvantages. A monopoly tends to have a poor level of service. A monopoly market is best known for consumer exploitation. There are indeed no competing products and as a result the consumer gets a raw deal in terms of quantity, quality and pricing. In a monopoly, lack of competition leads to low quality and out dated goods and services and consumers may be charged high prices for these low quality goods and services.
Tag: Monopoly
-
Advantages of a Monopoly.
Monopoly is the the exclusive possession or control of the supply or trade in a commodity or service. Monopolies usually have disadvantages but in some circumstances they have advantages. There are more economies of scale in a monopoly. With increased output in the monopoly there may be a decrease in average costs of production. These can be passed on to consumers in the form of lower prices. There is also more international competitiveness in a monopoly. For instance, a domestic firm may have a monopoly power in the domestic country but face effective competition in global markets. With markets increasingly globalising, it may be necessary for a firm to have a domestic monopoly in order to be competitive internationally. A monopoly is a symbol of power. A firm may become a monopoly through being efficient and dynamic. A monopoly is thus a sign of success not inefficiency.