Monopoly Power

                                                            (http://glossynews.com)

Those ignorant to the institutions running the game may not be concerned with monopoly power. However, monopolies could be potentially harmful to our economic system. Mark Thoma mentions in his CBS article that monopolies have too much power within the free market. He goes on to explain that ¨When firms have such power, they charge prices that are higher than can be justified based upon the costs of production, prices that are higher than they would be if the market was more competitive¨.

Let´s talk price gouging for example. During natural disasters companies often raise their prices because of demand. More people have a need for things like water and toilet paper, so monopolies are going to raise their prices. At this time price gouging is illegal to a certain extent. Although many believe that price gouging should be acceptable in a free market. Monopoly power can be very detrimental to those who are in need. This brings up the question of whether or not we should place more limits upon monopolies. When monopolies are allowed to work freely from the government they would be working for their own incentives. A libertarian would argue that in fact, this would not hurt society because monopolies want to provide for us productively. However, monopolies may not necessarily be paying attention to the safety of their products.

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