Write a 4 pages paper on monopoly market structure. In the operating system of monopoly there is usually one firm that provides the majority of the products and services sold and there may be a handfu

Write a 4 pages paper on monopoly market structure. In the operating system of monopoly there is usually one firm that provides the majority of the products and services sold and there may be a handful of smaller firms that might have little or no impact on the large dominant firm

Because of the lack of competition the firms in the monopoly makes super normal economic profit which attracts other firms to enter the market. However there are quite some barriers for the new entrants (Mike Moffatt).

The technology may be such as to exhibit substantial economies of scale which require only a single plant if the economies are to be fully reaped. For example in transport, electricity, and communications there are substantial economies which can be realized only at large scales of output. The size of the market may not allow the existence of more than a single large plant. In those conditions it is said that the market creates a natural monopoly and it is usually the government in such cases undertakes the production and distribution of the commodity or service so as to avoid the exploitation of the consumers.

There is an ongoing debate about the advantages and disadvantages of monopoly. "The consensus seems to be that the economic case for and against monopoly needs to be judged on a case by case basis- particularly when assessing the impact on economic welfare" (Tutor2u).