As monopolies often operate on an immense scale they can exploit economies of scale

Economies of scale occur when output increases and unit costs decrease

These cost reductions will lead to a decrease in costs and increase in profits for the monopoly producer

However some of the gains in productive efficiency may be transferred to the consumer in the forms of profits

Government regulation of monopolies means annual price increases can be controlled

Some of the monopolies profits may be used to invest in research and development

This expenditure on innovation and invention could lead to efficiency gains in the market

If a firm is operating as a domestic monopoly but is open to international competition their market power will be limited and they will therefore have to charge lower prices