Monopoly is the the exclusive possession or control of the supply or trade in a commodity or service. Monopolies usually have disadvantages but in some circumstances they have advantages. There are more economies of scale in a monopoly. With increased output in the monopoly there may be a decrease in average costs of production. These can be passed on to consumers in the form of lower prices. There is also more international competitiveness in a monopoly. For instance, a domestic firm may have a monopoly power in the domestic country but face effective competition in global markets. With markets increasingly globalising, it may be necessary for a firm to have a domestic monopoly in order to be competitive internationally. A monopoly is a symbol of power. A firm may become a monopoly through being efficient and dynamic. A monopoly is thus a sign of success not inefficiency.
