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
Some of the pros of capitalism include increased market efficiency and increased economic growth, while some of the cons include wealth inequality and lack of public services. Capitalism is an economic system in which the government exerts little influence, and private companies control the production of goods and services.Full Answer >
Advantages of exporting include increased sales, gaining global market shares, diversification, lower cost per unit and expansion within the company. Disadvantages include extra costs, the possibility of needing to change products, payment collection complications and difficulties in getting reliable market information.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 >
Two different kinds of monopolies are a pure monopoly and a monopolistic competition. When one company gains control over a specific niche in the market it is generally referred to as a "monopoly."Full Answer >