Question

With an aid of a diagram, show that Monopoly will never produce any socially desirable outcome

Answer 1

The monopolist who is going to offer the sale using the monopoly system can never set the price he wants, but he always uses this system for maximizing the profit.

Because of the changing market demand, he cannot get an acceptable outcome.

Answer 2

Monopoly is where a single market controls the economy of a given state or region bloc. This market system will favor the consumers desirably since they take advantage of being the only producers in the market and them facing no competition. This therefore catalyses them and they increases the market price and production of lower quality goods.