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Monopolies

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What effects do monopolies have on a capitalistic economy? What are some advantages and disadvantages of monopolies? Give some examples of monopoly type companies? What are some key barriers to entry and exit for monopolies and oligopolies?

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The solution answers the following questions:
What effects do monopolies have on a capitalistic economy? What are some advantages and disadvantages of monopolies? Give some examples of monopoly type companies? What are some key barriers to entry and exit for monopolies and oligopolies?

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A monopoly's effect on a capitalistic economy can be summarized via its advantages and disadvantages.

Advantages of a Monopoly:
1. Sometimes, monopolies are forced to behave as if there were competition because of the risk of losing their monopoly to new entrants.
2. Some argue that it can be good to allow a firm to attempt to monopolize a market, since practices such as dumping can ...

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