Yahoo Answers is shutting down on 4 May 2021 (Eastern Time) and the Yahoo Answers website is now in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.

Why are monopolies bad?

The only time I could see a monopoly being bad is if it was a necessity like air or water. If the company raises the price of anything else too much, people will either stop buying it or shop for a similar product.

Update:

If there is no similar product, then what is preventing another company from making a similar product? Price? Then isn’t the market already running efficiently?

6 Answers

Relevance
  • Dick
    Lv 7
    1 week ago

    If they have a monopoly there is no similar product. You PAY.

  • RoVale
    Lv 7
    1 week ago

    Lack of competition, fewer options for consumers, more expensive.

  • 1 week ago

    If there's a monopoly, there aren't other options for people to buy it somewhere else.

  • Oiy
    Lv 7
    1 week ago

    Because the consumer will have a smaller consumer surplus while the producer can maximize his profits still. The price will be set at mc=mr which is higher than mc or the price in the perfectly competitive market.

  • Anonymous
    1 week ago

    You literally answered your own question. The point of stopping market monopoly is so that consumers have choice. You ended by saying people will shop for a similar product. But if a company monopolizes a market, from where would they find a similar product? That's the point, variety and choice for the consumer. This, in theory, drives growth and development of new businesses. If they have a chance. That's what anti-monopoly laws are supposed to protect. 

  • 1 week ago

    You just said why; it allows a company to raise the price and hold the consumer hostage because in a monopoly there IS NO similar product available. A monopoly means the company owns and controls all the desirable versions of any product or service.

Still have questions? Get answers by asking now.