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Evaluate the costs and benefits to economic welfare of monopoly relative to perfect competition. Perfect competition is a market equilibrium in which all resources are allocated and used efficiently, and collective social welfare is maximized. In perfect competitive markets, there are many sellers, perfect information about the prices all sellers in the market charge and no barriers to entry & exit of firms in long run so the market is open to competition from new suppliers. However in a pure monopoly, there is only one seller in the market, which also sets the price of its good or service, which have no close substitutes. Monopolistic markets are characterized by an absence of competition - which often results in high prices [particularly if their product is highly inelastic], low quality products, price discrimination and low level of efficiency. Many argue the potential economic welfare loss arising from the exploitation of monopoly...

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