Question

Do monopoly powers harm an economy? How so? Be logical and thorough.

Answer 1

Yes,monopoly powers harm the economy.

Monopolies restrict free trade, preventing the market from setting prices. That creates the following four adverse effects.
1. Since monopolies are the only provider, they can set any price they choose. That's known as price-fixing. They can do this regardless of demand because they know the consumer has no choice. It's especially true for goods and services where there is inelastic demand. That's where people don't have a lot of flexibility. An example of this is gasoline. Some drivers could switch to mass transit or bicycles, but most can't.
2. Not only can monopolies raise prices, but they can also supply inferior products.
That's happened in some urban neighborhoods. Grocery stores know that the poor urban dweller has few alternatives.
3. Monopolies lose any incentive to innovate. They have no need to provide "new and improved" products. A 2017 study by the National Bureau of Economic Research found that U.S. businesses have invested less than expected since 2000.

That used to be true of cable companies. It's expensive to lay new cable. That meant residents had to accept the cable company's service and prices. Disruptive technology is the worst enemy of monopolies. Dish TV, iPads, and Netflix have created a new type of entertainment service. It doesn't rely on cable to deliver movies and TV programming. The same thing happened with land-line telephones.
4. Monopolies create inflation. Since they can set any price they want, they will raise costs to consumers. It's called cost-push inflation. A good example of how this works is the Organization of Petroleum Exporting Countries. The 12 oil exporting countries in OPEC now control the price of 46 percent of the oil produced in the world.
OPEC is more of a cartel than a monopoly. First, most of the oil is produced by one country, Saudi Arabia. It has a far greater ability to affect the price by itself by raising or lowering output. Second, all members must agree to the price set by OPEC. Even then, some may try to undercut the price to gain a little extra market share. Enforcing the OPEC price is not easy. Still, OPEC countries make more per barrel of oil than they did before OPEC. That power created the OPEC oil embargo in the 1970s.