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Is monopoly bad for the economy?
Monopoly is a single firm in the market where the number of buyers and large.
Monopoly exists due to the presence of copyrights and patents of their goods and services they provided? Now the question arises whether the monopoly is good or bad for the economy.
No doubt, monopolist discriminate the consumer by changing higher prices of their product because they are the sole owner of these products and convert all the consumer surplus to producer surplus and create dead weight loss in the economy, and reduce social welfare, thus we considered monopolist as bad, but this is not true always, sometimes monopoly is good for the economy.
Monopolist charge price greater than marginal cost and earn profit but if they charge price equal to marginal cost as in perfect competition, there will be normal profits in the economy, but to boost economy growth and lead to the development, technological progress is also necessary and if the producer will not earn super profits then they will not indulge themselves in innovative production as they are costly, they wan’t take the risk of taking new technology to the market, thus there will be no technology progress in the economy and economy will remain underdeveloped,
Thus we can say monopoly is not always bad for the economy.
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16 Comments. Leave new
Monopoly cuts down production costs, provides scales of economies and a better Lerner’s curve. Monopoly isn’t the worst case scenario in many product market.
Nice article.. but you need to add more information…
Good effort
Nice article 🙂
I feel that a regulated monopoly can best set an example for the topic you have chosen. It would have been really good if you could make it a bit detailed, nevertheless, good efforts.
I think all forms of market have their own disadvantages.
nicely written 🙂
Pure monopoly is rarely found in economic life. It would have been better of you would have included the concept of monopoly power and thumb rule of pricing to explain relationship between price and marginal cost. Nice efforts though.
Nice article but yes u could have added more info like price discrimination a major practice adopted by monopolistic.
u can add up more info.
Nice article
Monopoly leads to the distortion of economic resources.. it creates deadweight loss..thus it is considered inefficient from economic point of view as well as social point of view!
Nice Article 😀
good job
a well written article , good efforts
I appreciate your efforts!