Question

Why did Warren Buffet love monopoly and hate competition? Write at least one paragraph.

Answer 1

Monopoly ensures great profit. A monopolist will produce at a point where the MR and the MC are equal .At that point the quantity will be less than what the competitive industry will produce and price will be higher. That ensures that the monopoly that has a considerable control over the goods they are selling will make a profit in the long run as well.

On the other hand, a perfect competition will have a homogeneous good and many close substitute above that there is free entry and exit in the market. That reduce their profit to zero. no one like a market where the profit is less. But perfect market is always good for the consumer,