What are the benefits of a natural monopoly?

Answer 1

A monopoly is the means by which competive markets interact. An intermediary of competition among driving forces in any market sector. Some advantages of having a monopoly are; the ability to function in a complex market mechanism by ways of competition towards a puremonopoly, profit sharing firms exist in monopoly as they strive toward puremonopoly, oligopolistic competition, competitive edges cause markets to increase their barriers to entry and promote future advances in market sectors thereby promoting growth in economics. Without a monopoly, production will cease to be effective and supply/demand will flatline.

Answer 2

* Research and Development. Supernormal Profit can be used to fund high cost capital investment spending. Successful research can be used for improved products and lower costs in the long term. E.g. Telecommunications and Pharmaceuticals. * Economies of scale. Increased output will lead to a decrease in average costs of production. These can be passed on to consumers in the form of lower prices.

* A domestic firm may have Monopoly power in the domestic country but face effective competition in global markets. E.g. British Steel * A firm may become a monopoly through being efficient and dynamic. A monopoly is thus a sign of success not inefficiency. For example - Google

Answer 3

Retail price of the good is higher because any savings in the raw material (IE, computer software improvements like the difference in the capacity of a CD vs a floppy disc) or infrastructure (building paid off, shipping price decreases) are not made available to the consumer because the monopoly refuses to pass these on to the consumer because the good is not available anywhere else. Examples of this are the Microsoft computer operating system and home TV and internet services.

Answer 4

the advantage of monoplies business is that businessman only earns profit.

Answer 5

The major advantage of a monopoly is to the monopolist: all the money spent on that particular good or service flows to the monopolist.