ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Economists, however, identify six major functions of governments in market economies. Governments provide the legal and social framework, maintain competition, provide public goods and services, redistribute income, correct for externalities, and stabilize the economy.

Detailed explanation-2: -Antitrust laws and regulations are in place to discourage monopolistic operations, protect consumers, and ensure an open market.

Detailed explanation-3: -Monopolists have the power to set a high price for their products and thus, the government intervenes to regulate the monopoly power and prevent consumer exploitation.

Detailed explanation-4: -Natural Monopolies. One type of monopoly is the natural monopoly, which is called ‘natural’ because there is no direct government involvement. State Monopolies. Another type of monopoly is the state monopoly. Un-natural Monopolies.