A Monopoly with Large Economies of Scale Can Have a Lower Price than Competitive Firms Economies of scale mean that a monopoly producer can have lower costs of production than competitive firms. It’s cheaper to produce electricity for 100,000 homes with one large dam, for example, than with a solar panel for each home. If economies of scale are large enough, the monopoly price can be lower than the competitive price and the monopoly output can be higher than the competitive output.