5 Pros And 5 Cons Of A Monopoly

One key takeaway in discussing monopolies is that they can be an entirely beneficial asset to a community or a country. Yet, monopolies operate in coordination with the needs of consumers when they are regulated by a federal authority, and often only then. This is an important point to make when it comes to thinking about these types of immensely powerful businesses. The startup costs to compete with a railroad operator, electricity provider, or specialized waste management service, for instance, are astronomical and bar entry for all but the ultra-wealthy investor looking to jump into an entirely new sector. This type of investment virtually never happens, leading to the existence of certain regulated monopolies that are simply essential to providing consistent services to customers.

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Yet monopolies can be an entirely bad thing too. Monopoly power can easily run amok, interfering with political and social life and issues, and leading to unfair business operations that stifle innovation in the marketplace and provide customers with limited or poor quality goods. There is a happy medium that must be struck when it comes to monopoly power in the marketplace, and there are truly a number of positive elements and negative consequences that come along with the creation of a monopoly in any market sector.


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