What is a monopoly? Why is monopoly considered as a market failure?
What will be an ideal response?
A monopoly is a situation in which a single firm controls the production, distribution, or sale of a particular product, which forces all others out of business and prevents new competitors from entering the market. A monopoly is a market failure, because in the absence of competition, one firm can set prices for its product above what a competitive free market would allow. Under these circumstances members of a society are limited in their access to that product or service and when this occurs, the monopolistic firm profits, but consumers lose.
You might also like to view...
Democracy has evolved over time in America, and it is still evolving today
Indicate whether the statement is true or false.
Feminists argue that women have less of a "realist" world view
Indicate whether this statement is true or false.
The success of the British with respect to defending their ships from U-boats was based on
A. independent decision making and diffusion of authority. B. decentralization. C. centralization and communication. D. decentralization and rigorous procedure. E. flexibility and creativity.
______ refers to a system of states that relies on shifting alliances to balance relationships and prevent conflict.
Fill in the blank(s) with the appropriate word(s).