Are monopoly profits essential for higher innovation and economic growth?
No, just the reverse. Monopolist have no direct interest in innovation as this would reduce the profit, the capacity of the production is not oriented on the market demand but by the optimum investment and the utilization is not set at the maximum output but by the maximum profit (which is always lower than the maximum output). They have no interest to introduce a competing new product (or will do only very slowly) as this reduces short term the maximum profit by research and investment in new capacities and at the same time reduces the value and output of the existing production. The more competition the better: even if some companies produce the same product they will set the production output to the maximum as long as the cost of the last produced unit is lower than the production cost of this quantity. If the technology is free other competitors will invest in new capacity as long as there is an expected profit and they will invest more in research to find new technologies to reduc
