Monopolies generate economic profit and are therefore better able to invest in research & development which may improve their productive effiency, making them more dynamically efficient over time.

How is a monopoly dynamically efficient?

Monopolists can also be dynamically efficient – once protected from competition monopolies may undertake product or process innovation to derive higher profits, and in so doing become dynamically efficient. ... Because of barriers to entry, a monopolist can protect its inventions and innovations from theft or copying.

Why are monopolies efficient?

Firms benefit from monopoly power because: They can charge higher prices and make more profit than in a competitive market. The can benefit from economies of scale – by increasing size they can experience lower average costs – important for industries with high fixed costs and scope for specialisation.