Question

Find an example of a regulated monopoly. Do you agree that this monopoly should be regulated? If yes, how does regulating it benefit the society? (You may also consider what would happen if it weren't regulated) If no, what are your arguments against regulating it?

Answer 1

Let me begin my answer by explaining the meaning of regulated monopoly.

Regulated Monopoly

Regulated monopoly doesn't make big difference as it monopoly with regulations from the government. It is having all the characteristics like single seller, price maker, blockage of entry etc. However, these markets are regulated in some way or other by the government itself mainly to protect the interests of the consumers.

For example, Google holds the highest share of almost monopoly in case of search engine in internet.

Benefits in regulating monopoly

1. Helps in prevention of excessive pricing, it means that if there are no regulations, there are chances for setting higher prices above equilibrium.
2. Leads to providing quality service, i.e. the government has certain quality standards which has to be followed by the major players in the market.
3. Promoting competition