Monopoly (Controls Causes Advantage)

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Monopoly has different controls which we shall be highlighting but first let’s define it
This is a situation where there is only one producer or supplier of a particular commodity and who has the power to influence the price of the commodity in his/her favor.

Causes Of Monopoly

  1. Natural cause
  2. Merging of producers
  3. Act of Parliament
  4. Advertising
  5. Patent law
  6. To protect public interest
  7. The level of technology

Advantages

  1. It increases production
  2. Increase in supply
  3. It increases profit
  4. It avoids waste
  5. Consumers will benefit
  6. It leads to invention
  7. Creation of employment
  8. Cost per unit of the goods will reduce
  9. Prevents over production
  10. Members of staff may benefit by way of bonus
  11. Good use of resources
  12. Expansion is possible.

Disadvantages of  Monopoly

There are lot of disadvantages but in exam conditions you will only need to highlight some, below are the disadvantages of monopoly

  1. It breeds inefficiency
  2. Reduction in supply
  3. Results in inflation
  4. Causes unemployment
  5. Consumers bear the brunt
  6. It increases the cost of goods
  7. Results in over-production and wastage
  8. It leads to scarcity of goods
  9. Consumers are denied their traditional right of choose and pick.

Controls Of Monopoly

You can control it through the following methods

  • Privatization
  • Reduction in tariff
  • Discouraging advertising
  • Discouraging merging of firms
  • Issuing of more import licence.
  • Stopping the issuance of patent law.
About Aiseosa 258 Articles
I'm simply known as Sosa. A well known programmer and founder of the defunct Lectures Portal, Simplicity is my nature.

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