Question

Are monopolies a good thing?

Answer 1

As we all know that every coin has two sides.

similarly monopoly also has two faces, sometime it is good and sometime it is bad also

firstly let us get the meaning of monopoly.

Monopoly is a market type in which there is-

1.a single owner and large number of buyers .

2.tthere are barriers to entry in the market

3.price is decided by the seller .

so Monopoly is good when -

1.Some type of goods that have very high initial or front cost for installing like water supply, becauseif it is done on the private basis then the price charged may be very high .If it is controlled in the good hands then it ischeap for providing water to every home .

2.similar goes for the Indian Railways.They always focus on the best price for every class people living in the country and does act as a player of Creative monopoly.

In some cases Monopoly is also not good for the economy and these are-

1 when Monopoly is there then the price raise is there and it also not ensure that the good quality.They may supply inferior goods also because people have no choices .

2.Monopoly sometime also create inflation like situation because of rise in price of general goods and services .

The best example is the the OPEC that is oil and petroleum exporting countries which control and 46% of the oil produced in the world. Whenever any crisis hits on it, tje whole world suffers from the inflation of crude oil prices.