Monopolies are under constant critics from the public and other.

             producers of being polutive, straining to competition and they are.

             accused of worsening resource allocation. Whether this is true or.

             not, depends on the specific company, but certain characteristics.

             are possible to define. It is these I will describe in the.

             following, and hence conclude if monopolies worsen or improve.

             resource allocation.

             .

             It is important to distinguish between competition and monopoly.

             before describing advantages and disadvantages of both. Many.

             monopolies are government owned. This means that the incentive to.

             strive for more profit, better conditions etc. is gone. This is due.

             to the fact that, if there is a loss, the government will cover it,.

             and government owned companies seldom strive to achieve maximum.

             profits. A lot of the characteristics are also seen in privately.

             owned monopolizing firms. When they become so big, that competition.

             is practically gone, the incentive to make even more profits, and.

             being innovative diminishes.

             In a competitive industry this is not the case. The fear of.

             loosing your job, not being able to compete, your products becoming.

             obsolete etc. are important factors, which stimulate productivity.

             It is therefor obvious that the competitive industry will try.

             harder to allocate their resources in the most efficient way. .

             To land, the external costs in a competitive industry will often.

             be pollution, seeing that the firm will strive hard to diminish.

             their costs resulting in the firm ignoring 'unnecessary' costs. The.

             monopoly owned by the government, would never be able to ignore.

             such a serious matter, and they would have to pay the costs. A.

             monopoly would also have to be careful not to damage its image,.

             seeing that is, in many cases, already is unpopular.

             Capital, on the other hand, is often to the benefit of a monopoly,.

             since they produce at a large scale. To fully utilize capital, a.