Question

"I will make the argument that monopolies are a good thing. In fact, I believe they are needed to ensure the quality and delivery of the products they are selling or offering. This is important, especially if the product is valuable or expensive. A good example of this would be nuclear power plants. Power plants are extremely expensive to build, operate, and manage. Therefore, it would make sense for a monopoly to be responsible for the establishment and operation of powerplants. The monopoly would understand how to establish it, control prices, pay for it, and run it. If other, smaller companies were to establish power plants, it would be inefficient..."

My question is: HOW would they be inefficient? I am trying to think of a good argument.

Answer 1

still it can be mentioned that a Monopoly is inefficient given the fact that it is expensive to build and and tell the market but one has to understand that higher level of profits might not make the socially efficient output to take place as a result of which the benefit might not be received to all the people as a result of which the capacity is actually under used by the market and this underused capacity might lead to the reduction in in public usage as a result of which it would be difficult for the social welfare purposes and this actually makes Monopoly inefficient on the whole.