Journal Entry #15: Topic: What is a Monopoly?

The monopoly is a market with a single firm that produces a good or service for which no close substitute exists and that is protected by a barrier that prevents other firms from selling that good or service. In a monopoly, the supplier decides the produce and what price to change from the supply and demand curve which it’s trying to make the marginal cost and marginal revenue the same, maximizing economic profit. The cost for the monopoly is that the monopolist needs to figure out how to produce or control the market price, and the benefit is that the monopolist can control market price by maintaining their business or company because they’re no close substitute. They are concerned about inefficiency because inefficiency might have inefficiency on resources that a lot of waste is produced. High markup, for example the diamonds, are one of those monopoly that doesn’t give enough money to the Africans who get their diamonds for the supplier. Economist doesn’t like monopoly is that it transfers income away from consumers to monopolists. Economist doesn’t like inefficiency because on one can entry the business because a single seller or the first seller will benefit the most comparing to the new adding business in monopoly. Their benefits, monopoly, are innovation and creation that a firm gets a patent. It’s is worth it because if you contain a monopoly continuously then you’re stil the price controller and therefore you can still get your benefits.