Monopoly refers to a market structure which is characterized by having a single seller only who sells a unique product in a market. He doesn’t have any competition so to speak, as he is the only one selling in that market. This means that he controls the market all by himself which makes him the price maker as well. This hurts the independent entrepreneurs as he restricts them from entering the market through factors such as copyright and patent, licenses from the government, and ownership of resources.
When companies have the power of monopoly, the prices of their products are much higher regardless of the loss of justification from the production costs. This is something that they couldn’t do if there is more competition in the market. This is especially detrimental for the consumers because, despite the high price, they don’t have any other options in the market for affordable prices of goods and services. As a monopoly, a company can also deny its good and services to consumers. If the consumer is another company and the monopoly company refuses to sell its goods or services to them, there’s even a possibility of the buying company to shut down. In most cases, the reason for the refusal to sell is if the profit potential is slim. This further hurts the independent entrepreneur as a consumer.
Monopoly also brings economic repercussions as they don’t pay attention to improvements since they don’t have any competition. A market where there is competition creates an environment where businesses continuously innovate their products and services. Innovation in a monopoly market is the least of their concerns as long as their consumers still show the need for their products. The workforce in the monopolized firms can also be significantly low, which means that there are fewer job opportunities.
There are, however, some ways to counter monopoly, one of which is the free market. Such a market can survive this more frightening opponent than the governments. A free market supersedes the factors that give power to monopoly as entrepreneurs don’t have to adhere to any requirements of bureaucracy. There is no single ownership of resources because it is distributed appropriately across all participants. It is beneficial to both the independent entrepreneurs and consumers are significantly low, which creates a good flow of supply and demand.
Due to these features of a free market, there is a strong competition going on that encourages the entrepreneurs to further improve their products and services. One thing leads to the other because when these factors lead to more job opportunities and a healthier economic environment. Jobs are even available in the free market itself. You have the freedom to choose whatever work you want or where you want to work. The free market is freedom in the real sense of the word, and it’s the only market that can stand against monopoly.