Disadvantages of operating a monopolistic business.

[CALVINDOL]

The commercial activity of Monopoly is considered to be a situation where an individual is the only seller , distributor , and marketer of a particular product or services . While this could be a good way of only channeling income and profit of a particular business goods products and services it also could be a big problem . There is no doubt that when a business owner choose to be monopolized in a particular business sector and type of business services he or she only enjoys the profit and the income that comes in patronizing and selling the goods and services to members of the public and in as much as he enjoys the profit he also bears the losses . Monopoly has a whole lot of advantage but still there are some downside and disadvantage to being a monopolist business owner in the sense that no business organisation is guaranteed to be in existence forever especially if the business organisation can easily be threatened by members of the public and even by the government possibly for the sponsoring of capital projects and societal infrastructure .

In situation like this it is advised that Monopoly could be a bad idea and it is absolutely advisable and such a situation that a business owner do not practice Monopoly in urban areas of business production but if it was in a rural area he could be allowed and advisable . they are a whole lot of things that could make a business go out of existence for example natural disasters and even death .

 

[TOZZIBLINKZ]

Like do you have already mentioned and emphasized that the ability for an individual to establish and to control a monopolistic business is indeed not a great idea especially in areas that are modernised that is urban areas . But if it were to be in a rural area it could definitely be possible for an individual to monopolize a particular business activity has been the only seller and the only distributor of a particular business products or service . But whatever the case may be in monopolistic establishment of business is indeed a bad idea and although majority of people today are already establishing monopolistic kind of business but under that there is a big problem that is considered to be hiddenly seen .

Monopolistic business I'm basically considered to be like any other business that are not considered to be in existence forever and indeed no business organisation is totally guaranteed to be in existence forever and so from time to time it is totally allowed for a business organisation without an industrialized firm or a service providing company to always share its products to other marketers and distributors such as retailers and wholesalers so that its goods and services could be in proper circulation .

 

[King bell]

The disadvantage of operating a monopolistic business is that the business may not have to innovate, meaning it will be slow to change with the times. If the company is unable to innovate, it could lose its competitive edge in the market and the demand for its goods or services may decrease. The monopolistic business may not be able to recover from these losses. This can lead to a lack of investment in new products or even bankruptcy as a result of rising debts.

Additionally, another disadvantage is that monopolies often practice predatory pricing tactics and collusive agreements for instance through tacit collusion which could drive out competitors and create an unfavorable environment for consumers who are being manipulated into buying goods with higher prices than what they would otherwise pay otherwise if there were more competition in the market.

Monopolistic business often operate with low cost systems which enable them to lower prices, affordable goods, and excellent customer service that consumers often expect from large corporations which can potentially attract customers. Monopolistic businesses can also experience higher profits than their competitors because of the economies of scale that are greater in monopolies. This benefit does not go to the consumer as high prices are paid by the companies' customers which is where higher costs come from.

Despite this, monopolistic businesses may be able to raise prices more rapidly than non-monopolistic businesses due to their power in the market, resulting in lower prices for consumers at some point but at greater cost to the company itself in terms of lowered profits and poorer customer service.

 

[Mastergp]

Before we look into it disadvantages let look at what monopoly really mean:

What is monopoly :
Monopoly base on my own idea can be define as a means in which process of competition is low, making one the only source provider of goods and services in a particular location. This aspect of marketing usually occur at rural area because the means of investment are usually low. Those engaging in this form of trade usually buy their goods in larger quality because those needing their product are vast. In some area such business may be the only seller of such product in that locality.
They are many disadvantages of monopoly business that one can consider before investing in this form of business :

Fixing of price for product:
The are the only sellers of that product in the location so the fixing of prices are basically theirs to chose and they product in place of superior products because the are no competitor to confirm the product quality, giving buyer no choice but to buy the product and at most times the sell this product at higher price.
Not showing seriousness toward work:
This part place competition in a positive side reason why monopoly could hinder success because the seller could not show sign of seriousness because he or she does not have any competitor, that is to say he can come to work at any time and go at any time, most time might not come for a month or more because there is no one competing with him or her.

 

[Holicent]

There are many Disadvantages of operating a monopolistic business. One disadvantage of operating a monopolistic business is the fact that the company will be able to charge higher prices than it would if it was in competition. The company can also raise prices without having to worry about other companies entering the market, which helps them keep their profits high.

Another disadvantage to operating in a monopoly is that there are no incentives for employees to work harder or more efficiently, as they know they will not be competing against each other for customers. Employees may also refuse to do their jobs because they do not want to work under such low wages and conditions.

Monopolies also tend to have less innovation than competitive businesses because there is little incentive for innovators who are not part of the company's profit margins to come up with new ideas that could make money for everyone involved in the process.