Monopolies earn abnormal profits and are the sole producers in the market which can exploit the customers by charging higher than normal prices. Since they are the price setters, customers have no other choice. Usually, it is said that monopoly is a sign of efficiency which is achieved by producing the same product for a number of years. Monopoly results in higher advantages (for the seller) and enables them to achieve economies of scale earlier than oligopoly. If monopoly is created by a government organization, then government can lower the prices for increasing welfare and easy access of that product to the society. Therefore monopoly is not always bad. There are more positives associated with Oligopoly as compared to monopoly. In oligopoly, the price of the market is set by the market not by the sellers which enable them to earn normal profits and result in lesser exploitation of customers. The firms in oligopoly are always in competition with each other which results in better products, better customer service and more innovation in terms of customer satisfaction. However, oligopoly turns out to be negative for the customers if they make a cartel to set price levels and other business agreements.
