Monopolies and cartels will give customers disadvantages. The customer has no choice other to buy products at a higher price.
EXPLANATION
Monopolies mean that a company is the sole provider of a product or a service. Therefore, this company has no competition, hence no price restrictions too. Monopolies use acquisitions, mergers, and patents to obtain the dominance of an industry, and also to prevent new market entry. If the monopoly is not regulated, it will deeply affect businesses, consumers, and also the economy itself.
This is because the company that does monopoly can raise the price as much as they want, and the customers still have to buy it from them, since they will find no alternatives other than their products or services. The same goes for cartels.
Business cartels happen when competitors get together. The competitors then have an agreement that they would not compete against each other. They fix the price and sharing markets or rigging bids for contracts on who will win. Therefore, business cartels rip customers off. Customers also have to buy the products and services that have a fixed price, which is not a fair deal for them.
This means that both monopolies and business cartels both give customers disadvantages. They both “force” customers to buy products or services at this specific price, which can be way higher than the original cost of production or can be because of the deal of the competitors.
LEARN MORE
If you’re interested in learning more about this topic, we recommend you to also take a look at the following questions:
Business leaders begin vertical integration: brainly.com/question/13157817
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KEYWORD: cartels, monopolies, customers
Subject: Social Studies
Class: 7-9
Subchapter: Cartels and Monopolies
