Monopolies
by Marianne Lisa Ross
1. Benefits
1.1. International Competitiveness
1.2. Economies of scale
1.3. Competitive firms can become monopoly firms by being innovative and efficient
1.4. Encourages research and development
2. Disadvantages
2.1. Less choices for consumers
2.2. Restricting output onto the market
2.3. Price discrimination
2.4. Allocative inefficiency because P>MC
2.5. Productive inefficient because not lowest point of AC Curve
3. Barriers to entry
3.1. Monopoly Resources
3.1.1. Monopolies rarely occur for this reason
3.2. Government Regulation
3.2.1. Patent and copyright laws
3.3. Production Process
3.3.1. A single firm can produce output at a lower cost than a larger number of producers.