The monopoly market structure has negative impact on the society. In this market structure only a single company operates and its charge very high value for money for its services and products to customers. Due to this reason many times society did not get value for money. People are forced to pay more than required and they did not feel valued for money on money which they spend on the product and services which are produced and provided by the companies. Interesting fact is that due to the absence of rivals in the market firms operating in this structure often did not make changes in the cost structure (Crapis and et.al., 2017). Hence, due to no change in the cost structure society is forced to pay the same amount or more in the market for product produced and services offered by the firm that is in a monopoly market. Another negative side of monopoly is that firm did not innovate its product line. Means that firm will consistently charge high prices for its product, and it know that there is no value of money for the product and even though it did not make efforts to improve its product line so that value for money can be provided to the society. Thus, in this way, monopoly negatively affects the entire society (Posner and Weyl, 2017). The firm takes more advantage and sometimes its supply product to the people that lacks in quality. There is no alternative and due to this reason people are forced to pay more for the product and accept or use product that even does not have quality. Thus, monopoly negatively affects the entire society.
In an oligopoly market few companies operate and they have large market share. These firms hold entire market and due to this reason it becomes harder for new players to enter into the market. These firms often did not innovate their product line and keep going to sell the same type of product in the market. The interesting fact is that many times in such kind of market structure firms prepare cartel. Under the cartel system they offer products at almost similar and a higher price (Eichner, 2019). Thus, society has no alternative and it is forced to pay more for the product produced by the company. Cartel system has many other negative impact on the society. Those firms that are highly successful in the oligopoly market structure have political connections. For fulfilling their self interest these companies use political influence and many times take decisions that are against the society interest (Lambertini and Tampieri, 2015). Thus, it can be said that many times firms operating in the oligopoly market directly negatively affect entire society. Firms operate in the oligopoly market often give due importance to money then society. Those individuals that cannot contribute to their business is expelled from the business. Such kind of practices is common and negatively affects entire society.
REFERENCE
Books and Journals
Crapis, D. and et.al., 2017. Monopoly pricing in the presence of social learning. Management Science. 63(11). 3586-3608.
Eichner, A. S., 2019. The Emergence of Oligopoly: Sugar refining as a case study. JHU Press.
Lambertini, L. and Tampieri, A., 2015. Incentives, performance and desirability of socially responsible firms in a Cournot oligopoly. Economic Modelling. 50. 40-48.
Posner, E. A. and Weyl, E. G., 2017. Property is only another name for monopoly. Journal of Legal Analysis. 9(1). 51-123.
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