Effect Analysis of Monopoly in Resource Allocation

As to monopoly, most traditional idea held unfavorable and negative attitude. In this paper, some traditional theories about low efficiency of monopoly were discussed first.While it's really difficult to meet the strict requirements of hypothesis, the deductions of low productivity, high price and consumer surplus on the condition of monopoly are untenable. From the angle of scale economy, exterior benefit and technology innovation, this paper put forward the strong points of monopoly such as the high efficiency in resource allocation and improvement of the international competition power. So the modern market economy is droved by both the forces of competition and monopoly.