Monopolies Are Worse Than We Thought

Monopolies Are Worse Than We Thought

Economists are increasingly turning their attention to the problem of monopoly. This doesn’t mean literal monopoly, like when one utility company provides all the power in a city. It refers to market concentration in general — when an industry goes from having 20 players to having only 10, or when the four biggest companies in an industry start taking a bigger and bigger share of sales. This sort of creeping oligopoly acts much like a literal monopoly — it raises prices, limits market size and tends to make the economy less efficient.

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