d) Advantages and disadvantages

e) costs and benefits of monopoly to firms, consumers, employees and suppliers

for firms

• advantages of monopoly power

  • dynamically efficient

  • economies of scale

• disadvantages of monopoly power

  • allocatively, productively, x-inefficient

  • diseconomies of scale

for employees

• advantages of monopoly power

  • stable progressions and benefits

  • job security

• disadvantages of monopoly power

  • wage suppression

  • lack of alternatives

for consumers

• advantages of monopoly power

  • lower prices

  • improved product quality

• disadvantages of monopoly power

  • higher prices

  • reduced product quality

for suppliers

• advantages of monopoly power

  • improved reputation

  • more sales

• disadvantages of monopoly power

  • consistently low profits

  • driven out of business