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A monopoly exists when a company obtains complete market power. With total power over the product the monopoly provides, it can raise the prices of products as it pleases, forcing the consumer to pay more for the goods it provides as these goods are not available anywhere else.
This problem is avoided by government intervention, by which the government imposes a maximum or minimum price on the market, ultimately avoiding market failure.
Wiki User
∙ 13y ago
Wiki User
∙ 14y agoMonopolies can raise prices on consumers.
Monopolies can essentially only be created by coercion. For example, government can pass a law that says you need to buy insurance from a specific company. Then that company can raise prices.
In a free market the only way to reliably raise prices in the medium to long term is to create a more innovative good or service. Otherwise, if prices are raised consumers will simply go to the competition to get their good or service.
Wiki User
∙ 13y agocostumers can then only buy from one place for the item
then that company can make it really expensive
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How do the features of perfect competition and monopoly affect the outcomes of the market?
Economists use two sets of concepts to answer questions. First they apply efficiency concepts such as productive efficiency. Then they ask how perfect competition and monopoly affect the consumer.
Which type of competition leads to exploitation of consumer?
Monopoly
Is an electricity company an example of monopoly?
Yes, it is more beneficial for the economy to have utilities as a monopoly, although they are considered as a 'natural' monopoly. Governments can nationalise the utility in order to maximise social welfare rather than maximise profit, this will keep prices low, keep output high and increase consumer surplus and consumer choice. Your welcome
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Importance of elasticity of demand and supply?
exploitation of monopoly power in market-the extent to which a firm or firm with monopoly power can raise price in market to extract consumer surplus and it into extraprofit
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Closing an account will affect your credit score and decrease your score.
How do the features of perfect competition and monopoly affect the outcomes of the market?
Economists use two sets of concepts to answer questions. First they apply efficiency concepts such as productive efficiency. Then they ask how perfect competition and monopoly affect the consumer.
Which type of competition leads to exploitation of consumer?
Monopoly
Is a hazardous building affect a skyscraper in monopoly city?
Can a hazardous building affect a skyscraper in monopoly city
How would you classify the monopoly game as a consumer product?
A board game
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by monopoly thebmanufacturers can fix any amount as price and poor consumers can't bear it.
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Negatively.
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d
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