Monopoly affects how markets work and what consumers decide to buy in a few important ways:
Control of Prices: A monopoly can set prices higher than when there are many competitors. For instance, if one company is the only one selling a certain smartphone brand, it can charge a lot more since there are no other brands to compare with.
Fewer Choices: When there’s a monopoly, consumers have fewer options to pick from. Using the smartphone example again, without other brands, you can’t find different features or prices.
Wasted Resources: Monopolies can cause resources to be used poorly because they don’t have to worry about improving their products or services.
In short, monopolies decrease competition. This leads to higher prices and less choice for people buying goods.
Monopoly affects how markets work and what consumers decide to buy in a few important ways:
Control of Prices: A monopoly can set prices higher than when there are many competitors. For instance, if one company is the only one selling a certain smartphone brand, it can charge a lot more since there are no other brands to compare with.
Fewer Choices: When there’s a monopoly, consumers have fewer options to pick from. Using the smartphone example again, without other brands, you can’t find different features or prices.
Wasted Resources: Monopolies can cause resources to be used poorly because they don’t have to worry about improving their products or services.
In short, monopolies decrease competition. This leads to higher prices and less choice for people buying goods.