what are the advantages of Monopoly ?
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1. Research and Development- Monopolies can make supernormal profit; this can be used to fund high cost capital investment spending.
2. Economies of scale- Increased output will lead to a decrease in average costs of production. These can be passed on to consumers in the form of lower prices.
3. International Competitiveness- A domestic firm may have Monopoly power in the domestic country but face effective competition in global markets. E.g. British Steel. With markets increasingly globalised, it may be necessary for a firm to have a domestic monopoly in order to be competitive internationally
4. Monopolies can be successful firms- A firm may become a monopoly through being efficient and dynamic. A monopoly is thus a sign of success not inefficiency. For example – Google has gained monopoly power through being regarded as best firm for search engines.
2. Economies of scale- Increased output will lead to a decrease in average costs of production. These can be passed on to consumers in the form of lower prices.
3. International Competitiveness- A domestic firm may have Monopoly power in the domestic country but face effective competition in global markets. E.g. British Steel. With markets increasingly globalised, it may be necessary for a firm to have a domestic monopoly in order to be competitive internationally
4. Monopolies can be successful firms- A firm may become a monopoly through being efficient and dynamic. A monopoly is thus a sign of success not inefficiency. For example – Google has gained monopoly power through being regarded as best firm for search engines.
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