What is the main reason monopolies are discouraged in most countries?
A. They always provide bad service
B. They hire too few workers
C. They set prices too low
D. They reduce competition and raise prices
Answer (2)
The correct answer is letter D. They reduce competition and raise pricesMonopolies can set very high prices because there are no other businesses competing with them. This is bad for consumers. For example, if only one company sold bottled water in Metro Manila, they could charge any price they want.
The main reason monopolies are discouraged in most countries is D. They reduce competition and raise prices.Monopolies control the entire market for a product or service, which means there is no competition. Without competition, monopolies can charge higher prices and may have less incentive to improve quality or innovate, which can harm consumers and the overall economy.
