“Monopolists are not technologically competitive.” Explain

What will be an ideal response?

Although a monopolist’s economic profit provides ample means to finance research and development, it has little incentive to implement new techniques (or products). The absence of competitors means there is no external pressure for technological advance in a monopolized market. Monopolists can afford to be inefficient and lethargic with no penalty. One argument is that research and technological advance may be one of the monopolist’s barriers to entry and, therefore, it must continue to seek technological advance to avoid falling prey to new rivals to maintain its monopoly power.