Do monopolies help or hurt a:consumers and b: the economy as a whole? Provide examples for your argument.?
Answer:
Generally both. The only entity benefited by a monopoly is the monopolist. Monopolists control production and price to maximize profit (equilibrium quantity MR=MC vs. MC=MV). While this increases the producer's surplus, it drastically reduces the consumer's surplus and creates a deadweight loss. Less is produced than should be, and thus consumers pay more per unit of product and consume less than they would in a competitive market. This is an example of inefficiency which on the whole makes the entire economy as a whole worse off.
As with everything, however, there are exceptions where a monopoly is inefficient but nonetheless better than the alternative. These are natural monopolies like utility companies, where there is little differentiation and fixed costs are too great to warrant more than one firm--though these are usually regulated to reduce the inefficiency. Further, patent rights (which are a form of monopoly) are inefficient, but are necessary to promote development of products that would not otherwise be available.
Hurt both.
They hurt consumers because monopolies result in higher prices than competition.
And they hurt the economy as a whole because monopolies do not promote the efficient use of our resources.
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