Economics Questions and Answers

Start Your Free Trial

What are the dangers of monopolies/lack of competition?

Expert Answers info

Greg Jackson, M.A. eNotes educator | Certified Educator

bookM.A. from University of Massachusetts-Boston


calendarEducator since 2018

write1,741 answers

starTop subjects are History, Literature, and Law and Politics

The negative effects that monopolies often have on economies has consistently led to societal criticism and anti-monopolistic regulations. These criticisms have reached from over a century ago to the present day. As your question suggests, this is often because monopolies lead to a lack of competition.

For one thing, monopolies have the potential to fuel inflation. Since they can set prices at whatever level they want, costs rise for consumers. This results in what has been termed as cost-push inflation. Higher costs can lead to a reduction in...

(The entire section contains 255 words.)

Unlock This Answer Now


check Approved by eNotes Editorial