With a monopoly, there may be stronger incentives for the firm to invest in research and development to create new and improved products, as they can capture a larger share of the market and earn substantial profits.
Monopolies may achieve economies of scale more easily than competitive firms. Economies of scale occur when the average cost of production decreases as the quantity of output increases. This can enable the monopoly to invest in advanced technologies and processes that might be cost-prohibitive for smaller, competitive firms.
Monopolies may have more stability and longer time horizons for planning compared to firms in highly competitive markets. This longer-term perspective can facilitate strategic investments in research and development, fostering dynamic efficiency.