Monopoly What Is a Monopoly?

Monopoly
What Is a Monopoly?
A monopoly is a market structure where a single seller or producer assumes a dominant position in an industry or a sector. Monopolies are discouraged in free-market economies as they stifle competition and limit substitutes for consumers.

KEY TAKEAWAYS

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  A monopoly is a market structure that consists of only one seller or producer.
  
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  A monopoly limits available substitutes for its product and creates barriers for competitors to enter the marketplace.
  
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  Monopolies can lead to unfair consumer practices.
  
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  Some monopolies such as those in the utility sector are government regulated.
  

Advantages of Monopoly:

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  Scale-based economies;
  
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  Most effective and dynamic;
  
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  Cost consistency;
  
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  Worldwide level of competition;
  
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  Support services that are losing money;
  
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  Innovation;
  
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  Significant profits;
  
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  A provider of necessary public utilities;
  
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  Possibly going through depression;
  

Disadvantages of Monopoly:

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  More expensive:
  
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  Under monopolies, there are fewer incentives for efficiency:
  
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  The Political advantage gained unfairly:
  
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  Utilizing consumers unfairly:
  
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  Lack of Productivity Leads To Dissatisfied Customers:
  
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  Employee mistreatment:
  
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  Product excellence:
  
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  Resource allocation:
  
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  Displeased clients: