Monopoly Is Not a Game

A lack of competition may be holding back the U.S. economy.

Well, that might be overdoing it.

Photographer: Ron Antonelli/Bloomberg

One of the basic lessons of economics is that monopolies are bad news. When there’s only one company in a market, it can jack up prices to above their efficient level. That gives a big boost to profits, but results in too few people being able to afford to buy what the company is selling. Most markets are not monopolies, but a similar principle holds for situations where there are only a few companies, called oligopolies. A lack of players stifles competition, raising profits but lowering overall economic output.

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