It is always preferred by the states to bring competition in the markets to increase the consumer benefits and to boost investments. The first advantage is that there is a lot of profit, which the companies in monopoly can earn. On the other hand, in perfect competition companies can only earn normal profit. The reason is that monopoly price is greater than competitive price. In monopoly, companies are not supposed to spend on selling expenses like marketing costs, while in perfect competition a lot of expenses are made on marketing and branding. There is more technological development in monopoly as compare to pure competition. As there are limited resources in the economy therefore, fewer firms can better and efficiently use them as compare to hundreds of firms in pure competition.
