What are the consequences of a monopoly?

The following are the consequences of monopoly;

• Exploitation of consumers. Monopolies tend to charge high prices in their goods since the consumers have nowhere to purchase such commodities. Their products are substandard as there is no competition in the market. There is a decline in customers? surplus as they pay higher and hence causing a locative inefficiency. Monopolies are associated with political influence and hence they can freely exploit consumers.
• Lack of innovation. With monopoly power, a firm does not need to venture into research as there is no competition in the market. On the other hand, monopoly power is characterized by high-profit making and therefore they can afford to invest in research and embracing new technology.
• Economies of scale. These are costs advantages gained by a firm if production is efficient. If a firm can lower costs and increase production is said to enjoy the economies of scale. It also reduces both the per-unit variable and fixed costs of production.