Question

Give possible reasons for the poor performance of the monopolies

Answer 1

Answer:

good morning your answer

Explanation:

1) Higher prices than in competitive markets Monopolies face inelastic demand and so can increase prices – giving consumers no alternative.

2)A decline in consumer surplus.

3)Monopolies have fewer incentives to be efficient.

4)Possible diseconomies of scale.

Answer 2

Supply can be restricted to keep prices high. This leads to underprovision, or scarcity. Thus, according to general equilibrium economics, a monopoly can cause deadweight loss, or a lack of equilibrium between supply and demand.