Types of Monopolies

Monopolies. They Suck. Considering that they generally charge higher prices, have lower output and produces lower quality products as explained in my Monopoly video. But what are they? Well, monopolies control a huge amount of a market. This means there’s less competition from other firms, which increases their bargaining power over consumers, allowing them to raise prices and be uncompetitive. Monopoly power can also be used to increase barriers to entry for firms who are yet to enter the market. Natural monopolies occur when the most efficient number of firms in the industry is one. This is because the industries where these natural monopolies operate have high fixed costs.

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