what are advantages and disadvantages of monopolies?

Question

please helpp meee!!

Answer 1

well when you have a monopoly you can build houses and hotels and bankrupt your little sister

Answer 2

From the point of view of society:

The advantage of a monopoly is that in some industries it is the most cost-effective way of providing services (the standard example is public utilities, as it would obviously be ineffecient to have 2 or more competing sewer or power distribution systems in a city, for example).

The disadvantage is that the prices charged by monopolies are always higher than they would be under perfectly competitive markets. This occurs because, unlike firms in perfectly competitive markets, monopolies are sometimes able to increase their revenues by raising prices (if they raise price, total sales will drop, but they will make up the difference on the increased revenue per unit sold, and, in contrast to competitive markets, there are no other sellers for buyers to go to, so the buyers have less leverage to keep prices low). The net result is that there will be what is called a "deadweight loss" to society. The simplest way to understand this is there will be potential buyers who would like to use the monopoly's product but cannot afford the profit-maximizing price set by the monopoly, but who would be willing to pay a price that would give the monopoly a profit (however, the monopoly does not offer them this price, because then they would have to offer it to everyone and it would reduce their revenue).

For example, the cable TV company might have costs of $30 a month per customer. Assume, for example, that if they charged $50 a month, they would get 1000 subscribers and if they charged $40 they would get 1200 subscribers. Obviously, it is better to charge $50 because they make a greater profit. But then there will be 200 people who will not have cable TV. Now, both these 200 people and the cable TV company would be better off if these 200 people paid $40 a month for cable TV, but the company can never offer this price, because then they would have to charge everyone less, and their total revenue would drop. On the other hand, if the market was competitive, then eventually firms would come along offering lower and lower prices, and all consumers would be better off.

Answer 3

Advantages: 1. Nostalgia. Everybody's played it. 2. The board just plain looks cool 3. It's cheap. 4. The negociation is fun. 5. Only lasts 90 minutes IF YOU PLAY BY THE RULES AS WRITTEN. Disadvantages: 1. Most people play with house rules that make the game take too long. 2. Player elimination: It sucks to be the first one out of a 6-player game. 3. 2/3 of the game is completey random (roll & move). The middle 1/3 where you negociate is the only fun part. 4. The game is over 100 years old... much better games have been designed since then (see Settlers Of Catan). 5. Nobody buys Monopoly for themselves. It's ALWAYS a gift for someone else: "Bob likes Star Wars... let's get him Star Wars Monopoly. Game sits in the attic until Bob's next garage sale.

Answer 4

In theory the only advantage to a monopoly is that in order for a company to have become a monopoly they must have been the most efficient company at what they do, so prices would stay low because of there efficiency. The disadvantage is that once a monopoly is in place they have total control over setting prices and can gouge the consumer.

Answer 5

The disadvantages are obvious. A monopoly can limit output for their product to maximize profits while providing less to consumers at higher priced than would be provided by competitive industries.
However a monopoly would be advantageous if the industry has very high fixed costs. A monopoly will provide products cheaper than competing firms because the fixed cost will need to be paid for only once. Examples are electric, water, gas service to homes.

Answer 6

Obviously an advantage of a monopoly would be you control the industry, you can decide what you will charge. Take dabears diamonds for example diamonds really arent that rare they just have a monopoly on them and charge through the roof truth is only 5% of the diamonds they buy are re sold this way they keep the supply of them in the market low and they can way overcharge. Cant really think of many disadvantages sorry >.<

Answer 7

Pro: Economies of Scale....like a large monopolistic firm can take advantage of economies of scale through specialization. (economies of scale being defined as producing stuff more efficiently because you're bigger).

A monopoly is also able to devote more money into research and development (R&D) because of it's increased profits (perfectly competative firms don't have economic profits, so although they do make some accounting profits they are unable to devote as much money into R&D as a monopoly), so it could become more efficient at producing goods if it wanted.

Con: At the same time, a monopoly isn't pressured into efficiency in the same way that a perfectly competative firm would be. A monopoly's efficiency can stagnate because there's no firms trying to take it out. There's no reason to produce more because you're already making a profit (whereas perfectly competative firms don't make economic profits).

Monopolies are able to set prices above what a supply demand equilibrium would dictate. (Clearly, if you're the only lemonade stand in the desert, then you can set the price to whatever it costs...whereas if you're one of many lemonade stands, you'll be stuck with what the going price is).

Answer 8

Advantages to monopolies: If opponent lands on one you can get a lot of money. Try to by hotels and houses 4 houses need to be bought before buying a hotel.
Disadvantages: If you land on someone elses Monoply you could lose a lot of money

Answer 9

disadvantages of monopilies include : price descrimintion , predatory pricing , HIGH BARRIEERS, highly inelstic firms and but out smaller firms

Answer 10

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what are advantages and disadvantages of monopolies?
please helpp meee!!