Final answer:
A global monopoly might earn less due to legal restrictions on market division and price-fixing, along with potential complacency leading to inefficiencies, as described by John Hicks in his critical view on monopolies favoring a quiet life over pleasing customers and maximizing profits.
Step-by-step explanation:
The notion that a firm with a global monopoly position might earn comparatively low profits can seem counterintuitive. However, when considering the legality and ethics surrounding business practices, it becomes clearer why this may occur. In many regions, such as the European Union and the United States, it is illegal for firms to divide markets and collaboratively set prices, which are strategies typically used to maximize profits in a monopolistic setting.
Moreover, monopolies can sometimes become complacent once they establish a significant barrier to entry for potential competitors. With no pressing need to innovate or improve services due to the lack of competition, a monopoly may experience inefficiencies and lose the incentive to offer superior products or lower prices. This was famously encapsulated by Nobel laureate John Hicks when he stated, "The best of all monopoly profits is a quiet life," highlighting how monopolies may prioritize a lack of disturbance over customer satisfaction and aggressive profit maximization.