Government regulation

Government control of monopolies or at the very least regulation of monopolistic industries is needed when dealing with critical national infrastructure operations , such as electricity generation , or water supply . These kinds of operations are critical to a country 's daily operations and provide essential services to the public in general and critical government infrastructure organizations . These kinds of industries are not usually suitable for a fully competitive market structure , and should be controlled to prevent any abuse of monopolistic power or to jeopardize the production of critical services or resources to

the economy

Economies of scale can be achieved in a monopoly , due to its single supplier status , as well as its pricing structure . These monopolies have to operate inside a framework that sets conditions for operation that try to prevent abuses of power and inefficiencies of services . The end consumer , and the government who allow a monopoly to control these kinds of services , are protected from this abuse by these conditions of operation . These conditions do however make entry into the market by another supplier very difficult , which in turn helps with market regulation due to the fact that a truly competitive market , with a variety of suppliers will not develop

If there is more competition in a market , then eventually an efficient allocation of resources and operations will occur . However , monopolies that have been setup to deal with the critical operations of a country argue against this theory . They argue that the very fact that the monopoly has...