This was another popular question which was attempted by many candidates. The question which is an aspect of market structure theory required the candidates to
(i) outline any three disadvantages of monopoly;
(ii) describe any two ways by which the powers of monopoly can be controlled.
The overall performance of the candiddates on the question was fair.
Some disadvantages of monopoly includes:
(i) Exploitation of consumers.
(ii) May lead to inefficiency and production of sub-standard products.
Waste resources because they carry excess capacity.
Restriction of consumer choice.
Monopoly can be controlled through:
Nationalization of private monopoly.
Encouragement of more competition by the government
Price control.
High taxes on monopoly profits
Government enactment of laws to prevent mergers and acquisitions which give rise to monopoly.
