ADVANTAGES AND DISADVANTAGES OF MONOPOLY

 ADVANTAGES OF MONOPOLY

  • A monopoly is able to provide better working conditions to employees because of the high profits realised

  • In some monopolies, high standards of services/goods are offered

ADVANTAGES AND DISADVANTAGES OF MONOPOLY


  • Monopolies always enjoy economies of scale. This may help the consumer in that the goods supplied by a monopoly will bear lower prices.

  • A monopolist may use the extra profit earned to carry out research and thus produce higher quality goods and services.

  • The consumer is protected in that essential services such as water and power supply is not left to private businesses who would exploit the consumers.

DISADVANTAGES OF MONOPOLY

  • A monopolist can control output so as to charge high prices

  • Consumers lack freedom of choice in that the product produced by a monopoly has no substitute

  • Low quality products may be availed to consumers due to lack of competition

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