Question

Which of the following are government policies designed to deal with monopolies?

i. Try to make monopolized industries more competitive.
ii. Regulate the behavior of monopolies.
iii. Turn some private monopolies into public enterprises.
iv. Do nothing at all.

Answer 1

Answer:

All options apply

Explanation:

i) The government can establish antitrust laws to increase market competition.

ii) The government can set rules that regulate the behavior of monopolies, e.g. setting price ceilings

iii) Some natural private monopolies can be bought by the government (usually local or regional) and turned into public companies, e.g. utilities

iv) The government can simply do nothing at all and hope that the market will by itself correct this issue when new competitors enter the market, e.g. Microsoft