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? asked in Social ScienceEconomics · 1 week ago

Why are monopolies bad?

The only time I could see a monopoly being bad is if it was a necessity like air or water. If the company raises the price of anything else too much, people will either stop buying it or shop for a similar product.

Update:

If there is no similar product, then what is preventing another company from making a similar product? Price? Then isn’t the market already running efficiently?

6 Answers

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  • ?
    Lv 7
    7 days ago

    If they have a monopoly there is no similar product. You PAY.

  • RoVale
    Lv 7
    7 days ago

    Lack of competition, fewer options for consumers, more expensive.

  • 1 week ago

    If there's a monopoly, there aren't other options for people to buy it somewhere else.

  • ?
    Lv 7
    1 week ago

    Because the consumer will have a smaller consumer surplus while the producer can maximize his profits still. The price will be set at mc=mr which is higher than mc or the price in the perfectly competitive market.

  • Anonymous
    1 week ago

    You literally answered your own question. The point of stopping market monopoly is so that consumers have choice. You ended by saying people will shop for a similar product. But if a company monopolizes a market, from where would they find a similar product? That's the point, variety and choice for the consumer. This, in theory, drives growth and development of new businesses. If they have a chance. That's what anti-monopoly laws are supposed to protect. 

  • 1 week ago

    You just said why; it allows a company to raise the price and hold the consumer hostage because in a monopoly there IS NO similar product available. A monopoly means the company owns and controls all the desirable versions of any product or service.

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