ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Promote the development of market externalities.
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Regulate industries in which a monopoly is in the public interest.
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Encourage monopolies.
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Discourage competition.
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Detailed explanation-1: -It is better to let the industry have a monopoly so that the producer can enjoy economies of scale and deliver goods at a low cost. Government regulation of such producers is required so that they do not start using their monopoly power to exploit consumers.
Detailed explanation-2: -The correct answer is Option D) the US Postal service. The postal service will have all the control and possession in providing services. It will dominate the whole market. It is the form in which the postal services will have full control over the market.
Detailed explanation-3: -Government and public authorities run these monopolies directly or impose price ceilings, which are not too low from monopoly price. This saves the consumers from having to pay high monopoly prices. This limits monopoly power.
Detailed explanation-4: -In many cases, government-created monopolies are intended to result in economies of scale that benefit consumers by keeping costs down. Utility companies that provide water, natural gas, or electricity are all examples of entities designed to benefit from economies of scale.
Detailed explanation-5: -Monopoly Example #1 – Railways. Monopoly Example #2 – Luxottica. Monopoly Example #3-Microsoft. Monopoly Example #4 – AB InBev. Monopoly Example #5 – Google. Monopoly Example #6 – Patents. Monopoly Example #7 – AT&T. Monopoly Example #8 – Facebook.