Explain the advantages a firm may gain from being a monopoly.

· The firm may be able to charge high prices ) due to lack of competition . This enables it to earn a high profit
· These firms may produce at lower costs due to economies of scale. They may also charge lower prices
· They may produce high quality products as high profits enable it to invest and innovate
· These firms may be able to compete with foreign firms and gain a wider market and export more. Thus they have stronger bargaining power with suppliers