(1) Against the public interest.
monopolies can be a deterant to public interest in the following
ways:-
- Monopolies dont produce at the equilibrium level or efficient
scale suitable to all as in the case of perfect competition which
results in efficient market outcome.
- They dont maximise the consumer surplus and their ineffieciency
leads to the creation of deadweight loss to the market.
- barriers to entry leads to no fair competition .
- The demand for the monopoly goods like that of microsoft is
inelastic because of the ecosystem created by them due to which
they can charge higher prices.
- Monopolist charge higher prices than the equilibrium price and
even price discriminate and maximise their profits rather than
maximising comsumer surplus.
(2) In public interest
There are far less advantages than disadvantages of a monopoly
as it usually has the goal of profit maximisation in mind and they
dont usually work in public interest. Some points are:-
- the huge profits that they earn helps them to do more RESEARCH
an DEVELOPMENT work and bring new innovations that may help the
people immensely which may later trickle down to all the
masses
- Since they have to reduce price to sell more units of output,
they cant charge any price they wish to even though price will be
higher.
- As the product requires huge costs and human resource to
develop, it is better for a monopoly to handle such goods as they
can provide them consistently