An Analysis of the Domino Offect Caused by the Monopoly on Resource Allocation

The negative impacts of monopoly on resource allocation can be mainly identified as blocking technology advance and innovation and decreasing resource allocation efficiency. For instance, big monopoly organizations usually manufacture products with high price while low production, which will result in the loss of consumer benefits, the unnecessary waste of social welfare and the unbalance of social resource allocation. The passive impacts of monopoly mainly embody in three aspects: first, throughout the economic scales and economic scopes, monopoly increases the production efficiency; second, productive centralization is beneficial for technology advance and innovation; third, the interactive effect and inter-conversion between monopoly and competition can boost the further development of the organization. The latter third aspect has directly led the release of anti-monopoly control in practice after the 2nd world war.