Solution Found!
Pros and Cons of Government-Created Monopolies
Chapter 15, Problem 1(choose chapter or problem)
Give an example of a government-created monopoly. Is creating this monopoly necessarily bad public policy? Explain.
Questions & Answers
QUESTION:
Give an example of a government-created monopoly. Is creating this monopoly necessarily bad public policy? Explain.
ANSWER:Step 1 of 2
Government-created monopolies are firms with the exclusive right to sell a particular good. The government restricts the entry of other firms by giving these firms the license, or patent and copyright to produce goods or services.
Government-created monopoly includes the postal system, electricity, telecommunications, railways etc.
Furthermore, patent holders of different products will also come under government-created monopolies; for instance, pharmacy and technology companies.
Creating a monopoly is not necessarily a bad policy because it has its benefits and costs.
Watch The Answer!
Pros and Cons of Government-Created Monopolies
Want To Learn More? To watch the entire video and ALL of the videos in the series:
Explore the concept of government-created monopolies, which are entities granted exclusive rights, like licenses, patents, and copyrights. While they can promote innovation and efficiently operate in high-cost industries, they might also introduce inefficiencies and stifle competition. Weighing the pros and cons is essential.