You are on page 1of 7

Market Condition in the Monopoly: The Role of the Government

Angelika Marie Caballero Michelle Dela Cruz Vanessa Escritor

Monopoly A firm that is the sole seller of a product without close substitutes .

The government responds to the problems in Monopoly by: • Trying to make monopolized industries more competitive • Regulating the behavior of the monopolies • Turning some private monopolies into public enterprises • Doing nothing at all .

Antitrust Laws  A collection of statutes aimed at curbing monopoly power  Gives the government various ways to promote competition  Allows the government to prevent mergers  Allows the government to break up companies Back .

Regulation Regulating the behavior of monopolists Common among natural monopolies (water and electric companies) Back .

Public Ownership  The government runs the monopoly itself rather than regulating a natural monopoly that is ran by a private firm .

Doing Nothing  It is often best for the government not to try to remedy the inefficiencies of monopoly pricing .