Is monopoly always bad?
Monopolies over a particular commodity, market or aspect of production are considered good or economically advisable in cases where free-market competition would be economically inefficient, the price to consumers should be regulated, or high risk and high entry costs inhibit initial investment in a necessary sector.
Why are natural monopolies important?
Why Natural Monopolies Are Allowed Natural monopolies are allowed when a single company can supply a product or service at a lower cost than any potential competitor, and at a volume that can service an entire market. As a result, the capital cost is a strong deterrent for potential competitors.
Why do monopolies exist today?
Monopolies typically originate due to barriers that prevent other companies from entering the market and giving the monopolist some competition. Ownership of a Key Resource: When one company exerts sole control over a resource that is necessary for the production of a specific product, the market may become a monopoly.