To begin with the question of monopoly vs., competition is too simple to be useful, it is much like asking whether big animals are more beautiful or more efficient than small animals. As the survey, there is a vast array of species of imperfect competition. Most have evolved to handle the special characteristics of the market they deal with, automobile firms are larger publicly owned companies because they need to raise capital to gain the efficiencies of mass production, lawyers are organized in partnerships because of the need to pool skills and enhance trust among clients, colleges are nonprofit organizations because profits and teaching are hard to mix, farms are operated by families because of the need to perform a wide variety of activities in sparsely populated regions.
In virtually all cases, as Milton Friedman states in his quote governments are choosing among different evils when they curb excessive market power. After two centuries of observing different market structures, many economists have concluded that promoting vigorous competition among unregulated firms is almost always the least of these evils. Removing barriers to entry and exit and ensuring strong prohibitions against collusion are the surest formula for preventing monopoly pricing and encouraging rapid innovation.
In virtually all cases, as Milton Friedman states in his quote governments are choosing among different evils when they curb excessive market power. After two centuries of observing different market structures, many economists have concluded that promoting vigorous competition among unregulated firms is almost always the least of these evils. Removing barriers to entry and exit and ensuring strong prohibitions against collusion are the surest formula for preventing monopoly pricing and encouraging rapid innovation.
