Question

Give two reasons why you think a monopoly could be a good thing for society.

you may use the diagram.

it is on the microeconomics side.

Answer 1

Monopoly is a good thing for society because of the following reasons:

1) Economies Of Scale: Monopoly being a single seller produces output at a large scale so enjoys the benefits of economies of scale as average cost falls with an increase in output.

2) Research and Development: Monopoly firms invest huge funds in research and development as they earn huge profits that lead to the invention of new and advanced cost-minimizing techniques of production. This promotes innovative ideas in the industry/economy.

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