Editing Monopoly (section)

==== Potential benefits ====
*'''Economies of scale and lower costs'''
*: In industries with high fixed costs, monopolists may achieve lower average production costs through scale economies that could theoretically be passed on to consumers. Natural monopolies in particular might offer lower prices than competitive markets could sustain because competition would require duplication of expensive infrastructure. This argument is frequently advanced regarding utilities and network industries where infrastructure costs represent a substantial portion of total costs.

*'''Innovation and research development'''
*: The prospect of achieving monopoly profits can provide powerful incentives for innovation and research development. The patent system explicitly recognizes this dynamic by granting temporary monopolies to inventors. Some economists argue that without the possibility of monopoly rewards, firms would underinvest in research and development due to difficulties appropriating the full benefits of their innovations. This perspective suggests that certain monopoly profits represent a legitimate return on innovation risk.  

*'''Standardization and stability'''
*: Monopolies can sometimes provide market stability and standardization benefits that competitive markets might not achieve as efficiently. For instance, a single dominant technology platform might create compatibility benefits that fragmented markets cannot match. Microsoft argued during its antitrust case that its integrated approach provided consumer benefits through standardization.  

*'''Cross-subsidization possibilities'''
*: Monopolists with multiple product lines or customer segments may engage in cross-subsidization'', using profits from one area to support services that might not be economically viable in competitive markets. This practice can sometimes serve social objectives, such as maintaining service to unprofitable rural customers while providing urban services.