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Are Monopolies Really Bad for Consumers?

It is a general and widely accepted notion that monopolies are bad for the economy and bad for consumers. They are expected to increase prices, while giving no choices to consumers as well as curb innovation in an industry. Markets being dominated by a few top brands gives them the power to be in control of that market including the quality of the product. Antitrust laws are put in place to prevent just this from happening. They ensure there is no control by a few big corporations, no price-fixing, and ample encouragement for innovation by different companies in the market.

In recently conducted research, Chicago Booth’s Anthony Zhang and Stanford’s C. Lanier Benkard and Ali Yurukoglu find that monopolies might not be all bad when it comes to individual products.

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