Essay: Monopolistic Scenario

Sample Essay

When considering the role of the public policy in this regard, it is imperative to realize that competition can be brought into use to encourage or discourage the presence of a monopoly. This is because of the fact that usually the most common source of the presence of a monopolistic scenario is the presence of economies of scale. This fact can be observed in the example that while consumers may not be completely satisfied with only one internet service provider, they may be just as unsatisfied with the presence of multiple internet service providers of who each and every one charges an unaffordable and high price (Geweke, 1999). We can surmise therefore that the presence of monopolistic behavior in relation with the presence of economies of scale, the presence of monopolistic behavior serves a productive role in the economy.

In cases where the presence of the subject monopoly is entirely natural, it is possible to implement regulations and checking procedures on the market leader’s pricing and products. Generally regulations such as these incorporate the charging of lower prices and to take away lesser profits. Even though discussions on monopoly are riddled with criticism when concerned with the presence of natural monopoly, it is essential to note that such cases generally exist where government intervention in the monopolistic behavior is hindered (Bishop, Kay & Mayer, 1994). It is for the same reason that the public policy towards monopoly is generally designed to address the necessity of a balance in the case of monopolistic behavior and government intervention.

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