Question

Monopolistic market is an extreme situation"". Discuss this statement.

Answer 1

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· The standard economic argument against monopolies is different. According to neoclassical analysis, a monopolistic market is undesirable because it restricts output, not because of monopolist benefits by raising prices. Restricted output equates to less production, which reduces total real social income.

Answer 2

A monopoly is a firm who is the sole seller of its product, and where there are no close substitutes. An unregulated monopoly has market power and can influence prices. Examples: Microsoft and Windows, DeBeers and diamonds, your local natural gas company...

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