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
- Natural cause
- Merging of producers
- Act of Parliament
- Patent law
- To protect public interest
- The level of technology
- It increases production
- Increase in supply
- It increases profit
- It avoids waste
- Consumers will benefit
- It leads to invention
- Creation of employment
- Cost per unit of the goods will reduce
- Prevents over production
- Members of staff may benefit by way of bonus
- Good use of resources
- 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
- It breeds inefficiency
- Reduction in supply
- Results in inflation
- Causes unemployment
- Consumers bear the brunt
- It increases the cost of goods
- Results in over-production and wastage
- It leads to scarcity of goods
- Consumers are denied their traditional right of choose and pick.
Controls Of Monopoly
You can control it through the following methods
- Reduction in tariff
- Discouraging advertising
- Discouraging merging of firms
- Issuing of more import licence.
- Stopping the issuance of patent law.