Well, this is macrumors and i try to stay away from economic theories, but you asked for it, so here we go:
Monopolies cause "allocative deadweight loss" (although its main argument applies towards state-owned enterprises)
What does that mean?
In a competitive market, producers dont have the freedom to set a price because the rival can always undercut them until the point where lowering the price will cause in a loss.
BUT the monopolist firm can decide the price it charges by varying the quantity it produces, so it will produce only up to the quantity where its profit is maximized. UNDER NORMAL CIRCUMSTANCES, the level of output is lower than the socially optimal one, which is where the max price a consumer is willing to pay is the same as the minimum price that the producer requires in order not to lose money.
When the amount produced is LESS than the socially optimal quantity, it means not serving some consumers who are perfectly willing to pay MORE than the minimum price that the producer requires but who are unwilling to bear the price at which the monopoly firm can max its profit. The unfulfilled desire of those neglected consumers is the social cost of monopoly.
So basically, monopolies will start losing more money when they start raising the price since consumers will either 1) not be able to access such services (since they will only make the MIN amount for MAX price and by using calculus, you would rather spend a little more in the amount produced and make a little less profit rather than having an EXACT amount although you would make the best profit IF you sold ALL items) or 2) consumers will just stop using it since cell phone devices are not a NECESSITY but instead a WANT. do you think you will pay whatever cellphone company if the price exceeds a certain comfort zone in your income bracket? you wont.
Furthermore, I will take it one more step. Monopolies can be good. If you look at the Mexican carrier, Telcel. The year Telcel was monopolized by Carlos Slim (riches man in the world now) coverage in Mexico grew more than it did in the hands of the state. According to the "monopoly=bad" argument, service in Mexico should have dropped in every other city that is not important in Mexico's economy while service should have exploded in cities such as Mexico City and Puebla. No, it exploded in the main cities while it also exploded with the whole country
In conclusion, monopolies are only dangerous IF the monopoly is a necessity based. i.e. lets say one man owned the whole united states food supply. Then yes, monopolies would be the worst. But not cell phone companies, cmon if monopolies were SOO good for the company why would Bell even break up his own company? just for the lulz? I dont think so. Because the government told him so? I certainly dont believe it since Bell probably would have had the power to lobby his way out and in case nothing worked he couldve just brought it up to the Supreme Court.
Anyways, enough with the economics jargon. Enjoy your economics class
now, i may just do it, stick with the four until the true end of my two year, and upgrade then, to avoid the extra $50.