Monopolies can have a big impact on consumers and the prices of goods in our economy. Usually, these impacts are not good compared to having more competition in the market. Here are some important points to understand:

1. Setting Prices

• When there is no competition, monopolies can set their prices much higher than what we see in competitive markets.
• For example, a monopoly might charge a price of $P_m$, which is greater than $P_c$ (the price in a competitive market). This means consumers end up paying more for the same products.

2. Fewer Choices for Consumers

• Monopolies often offer fewer product options. Research from the U.S. Census Bureau shows that in industries controlled by one main company, the variety of products can be up to 50% less.
• With fewer choices, consumers can feel unhappy. Also, with less competition, monopolies have less reason to make better products.

3. Loss of Economic Welfare

• Monopolies can create what is called a deadweight loss in the economy. This idea is usually shown as a triangle on graphs that show supply and demand, reflecting what is lost.
• For example, if a monopoly only supplies $Q_m$ (where $Q_m$ is less than $Q_c$), both consumers and producers can end up worse off than in a market with competition.

4. Higher Prices

• The Economic Policy Institute says that in monopoly markets, consumers might pay about 20-30% more for products than they would in a competitive market.
• In certain industries, like telecommunications, prices can be even higher—sometimes by more than 50%!

5. Less Innovation

• In markets with monopolies, companies often have less motivation to research and create new products. The ACCC found that monopolies typically spend 10% less on innovation compared to companies in competitive markets.

In short, monopolies can cause higher prices, fewer choices, a waste of resources, and less motivation to innovate. All of this can hurt consumers and lower the efficiency of our economy.