Question

Is monopoly desirable in a market economy? Why or why not?

Answer 1

The consumers are benefited more in the free market economy due to following the reasons.

• Price paid by the consumer in the free market is equal to MC the product'
• The consumers have more choice of goods
• The output produced in the free market is larger than the monopoly market
• consumers are price maker and sole control over the price in the market

The monopoly market is not desirable consumer market is following the reasons.

• The price paid by the consumers are greater than MC
• The consumers have no choice of the product only one product in the market
• The output level in the market produced by the firm is less than
• And consumer is price taker

Hence, monopoly is not desirable in consumers point of view because consumers are more benefited in perfect competation than the monopoly market.