GK
MARKETING MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Lack of technological progress in such industries.
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The dangerous impact on democratic government.
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The tendency to restrict output and charge higher price.
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The inability in an industry where there is a single producer.
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Detailed explanation-1: -The standard economic argument against monopolies is different. According to neoclassical analysis, a monopolistic market is undesirable because it restricts output, not because of monopolist benefits by raising prices. Restricted output equates to less production, which reduces total real social income.
Detailed explanation-2: -It may seem strange, but economists see no reason to criticize monopolies simply because they transfer wealth from customers to monopoly producers. That is because economists have no way of knowing who is the more worthy of the two parties-the producer or the customer.
Detailed explanation-3: -Monopolies have the ability to limit output, thus charging a higher price than would be possible in competitive markets. Unlike a competitive company, a monopoly can decrease production in order to charge a higher price.
Detailed explanation-4: -Monopolies are generally considered to be bad for consumers and the economy. When markets are dominated by a small number of big players, there’s a danger that these players can abuse their power to increase prices to customers.