Monopolies also need barriers to entry to protect them from new firms entering the market. Microsoft has created monopoly power by being the first firm. For example, Google became a monopoly through dominating the search engine market. Firms can increase market share by increasing their sales and possibly benefiting from economies of scale. Royal Mail or Patents for producing a drug. A good example is the oil industry, where the leading firms produce, refine and sell oil. Where a firm gains market power by controlling different stages of the production process. Where two firms join at the same stage of production, e.g. A government may be able to regulate monopolies to gain benefits of economies of scale, without the disadvantages of higher prices.Therefore, a monopoly may be needed in this industry. building new aeroplanes, research drugs). ![]()
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