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Certain types of monopolies exist and are allowed in a free market system. Here are some examples:
* When a patent is granted to, as example, a drug company, for a new drug, the company has sole rights to the manufacture of the drug for 17 years. Thus this company has a legal and natural monopoly;
* A key resource is owned by a single company. A clear instance of this is found by examining the De Beers company. De beers owns over 80% of the world's diamond mines and production. This is a rare form of monopoly however; and
* A natural monopoly begins when a single company can supply an entire market at a lower cost than can two or more other companies. Common examples of this are utility companies. It should be noted however, that in these cases, a regulatory body must give the utility permission to raise prices.
Wiki User
∙ 10y ago
Wiki User
∙ 11y agoFor efficiency's sake, with regard both to resources and money.
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Why do many governments in countries with market economies outlaw or control monopolies?
Monopolies can make excessive profits by over-charging consumers.
Why do many governments in countries with market economies control outlaw monopolies?
Monopolies can make excessive profits by over-charging consumers.
What are the four types of monopolies?
natural, geographic, technological, government
Which cause and effect demonstrate a negative quality of laissez-faire policies?
Law makers fail to regulate business-----companies form monopolies
In what way did expansion and global trade during the 15th to 18th centuries affect the economies of European countries?
"many governments legalized trade monopolies and placed regulations on private merchants." Explanation: Global trade came to completely change the way countries relations with one another, it also affected the social distribution of work, and the distribution of welth and access to resources, so many governments had to step up and take action to regulate private relations of trade, taxes and laws to regulate monopolies even though they were allowed under the law. The expansion of trade allowed a big economical growth however not for all citizens, only for few, as it also helped set the basis for the inequality crisis nowadays.
What prevents a pure monopoly from occurring?
Monopolies are usually bad for society so governments either nationalise them or regulate them.
Why should governments regulate competition in a country?
Study Island: to ensure a wide variety of products for consumeralso study island: to keep prices of goods and services low
Why do many governments in countries with market economies outlaw or control monopolies?
Monopolies can make excessive profits by over-charging consumers.
Why do many governments in countries with market economies control outlaw monopolies?
Monopolies can make excessive profits by over-charging consumers.
How did the sherman anti trust act regulate business?
Anti-trusts means "opposing large business monopolies".
What are the four types of monopolies?
natural, geographic, technological, government
Which was the first legislative act that was created to end monopolies and regulate businesses?
Sherman - anti trust act
What is one role of the governments department of justice?
Break up monopolies. Hope this helped! ~Chris
What is the role of the federal governments Department of Justice?
Break up monopolies. Hope this helped! ~Chris
Why are monopolies regulated by the government?
Monopolies are regulated to protect consumers. An unregulated monopoly can charge prices higher than the efficient level of production which causes some consumers to be left out of the market. Governments can combat this by breaking up monopolies with antitrust laws and turning monopolies into public entities.
Why does governments usually approve of natural monopolies?
The government action insures that we don't waste resources building additional plants when only one is needed. In return, a firm with natural monopoly agrees to let government control the prices it can charge and what services it must provide
Why does the us government regulate car manufacturing?
To prevent businesses monopolies in the market and insure safe, efficient cars are produced.
