(a) Outline any three disadvantages of monopoly
(b) In what two ways can monopoly be controlled?
(a) Some disadvantages of monopoly include: (i) exploitation of consumers
(ii) may lead to inefficiency and production of sub-standard products
(iii) waste resources because they carry excess capacity (iv) restriction of consumer choice.
(b) Monopoly can be controlled through:
(i) Nationalization of private enterprises
(ii) Encouragement of more competition by the government
(iii) Price control
(iv) High taxes on monopoly profits
(v) Government enactment of laws to
prevent mergers and acquisitions which give rise to monopoly.
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