Monopolies are often better-equipped to serve the public interest and compete internationally. They also have advantages in research and development and economies of scale. The primary problem with a monopoly is that it gives one company control and power of the marketing, which may lead to high customer costs.Know More
In areas such as law enforcement, utility services and fire and rescue, monopolies allow unified focus on serving the public. Competing organizations offering these services could lead to inconsistent service and response to community needs. Instead, monopolistic setups ensure that a singular system is in place. When a U.S. company competes in the global marketplace as a monopoly, it doesn't have to fend off domestic competitors as well as global ones. A single provider has the abilities to source low costs and operate with economies of scale, which ultimately can lead to better prices or value for end customers. Without competitive pressure, a monopoly also allows a provider to invest in quality research and development.
Another disadvantage of monopolies is that when a company doesn't have competition, it may become sluggish or comfortable in its controlling status. In such situations, the industry in which the company operates becomes stagnant and isn't able to progress in its ability to offer high-quality solutions. There is no competition for pricing, which limits the desire for a company to focus on value pricing.Learn more about Economics
A pro of national debt is that it is a good way for countries to get extra funds in the short term to invest in economic growth, whereas a con is the risk of accumulating too much debt. The federal government borrows money from the public and from itself.Full Answer >
Protectionism can promote the growth of burgeoning industries in developing countries, but it also leads to overall higher prices and reduced innovation. Government officials often implement measures of protectionism to assist the interests that keep them in office or to grow the public treasury. In general, all members of the global market benefit more from free-trade policies than from protectionism.Full Answer >
Supporters of central banking argue that it provides stability to the economy and allows the government to influence important aspects of the economy. However, central banking detractors argue that central banking unnecessarily expands the size and influence of government and leaves the economy more susceptible to corruption.Full Answer >
The disadvantages of monopolies are not to the monopolistic companies themselves, but are instead suffered by their competitors and the overall market through the effects of pricing discrimination, price fixing and the influence of "corporate cartels" that are able to deter competition through shared directorship and company mergers. Monopolies can act as "price makers" and force their competitors to become "price takers." Lacking the economies of scale enjoyed by a monopolistic company, a smaller company can then be "priced out" of the market, which leaves the field open to the monopoly company.Full Answer >