Most people criticize monopolies because they charge too high a price, but what economists object to is that monopolies do not supply enough output to be allocatively efficient. To understand why a monopoly is inefficient, it is helpful to compare it with the benchmark model of perfect competition.
<h3>What are monopolies?</h3>
When there is just one seller in the market, it is called a monopoly. The monopoly case is typically viewed as the complete antithesis of perfect competition in economic research. The industrial demand curve, which slopes downward, is, by definition, the demand curve that the monopolist faces.
A monopoly is when one business and its product control a whole sector, there is little to no competition, and customers are forced to buy the particular products or service from the one business.
Examples of natural monopolies include corporations that provide utilities such as electricity and natural gas. They are monopolies because it is expensive to enter the market and because newcomers are unable to offer the same services in numbers and at costs similar to the dominant enterprise.
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