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Monopolies for example can have economy of scale and conduct business very efficiently. The government can control business practices. But the government broke up Standard Oil and kept other businesses from merging. Why?
You need to take a history 101 course if you don't know the answer to your question. Monopolies are just so bad for so many in so many ways I don't know where to begin explaining it to you.
Because they could likely exercise pricing control over the government, as a potential vendor. It also limits competition, so all power is in the hands of one vendor.
In 1980, before ATT was broken up, a five-minute weekday call from New York to LA was $2.17, $6 today after inflation. In other words, charging for long distance was the most profitable business in America short of importing cocaine. And they had zero incentive to reduce cost to the consumer. So I remember making long-distance calls to my girlfriend 100 miles away in a rapid-fire way just to make sure we didn't run up our phone bill.
Now? The cost of a similar call doesn't even register on my radar.
Monopolies in of themselves are not bad or good. It's only when one uses it's monopoly power to take advantage of the market through unfair practices is when they are considered bad.
A monopoly will produce less of a good and charge a higher price for it than would exist in a competitive market. This is bad for consumers because there is less of a product and it costs more. In a theoretical perfectly competitive market price and output are set by the supply and demand.
There are many government sanctioned monopolies. For example the US Patent System grants an inventor a monopoly on her invention for a specified period of time. Cable TV providers typically are awarded government monopoly franchises to be the sole provider of Cable TV in a given area.
There are natural monopolies where only one seller survives. A natural monopoly is a type of monopoly that exists as a result of the high fixed costs or startup costs of operating a business in a specific industry. Additionally, natural monopolies can arise in industries that require unique raw materials, technology or other similar factors to operate.
Monopolies for example can have economy of scale and conduct business very efficiently. The government can control business practices. But the government broke up Standard Oil and kept other businesses from merging. Why?
Standard Oil used its huge influence to extract transportation concessions other refiners couldn't hope to compete with. Beyond that, they'd shift traffic away from railroads that would ship other people's product. Rockefeller had several very willing lieutenants that would go after competition with zeal. Thus the government steps in to break up monopolies that are no longer serving the public interest.
At the same time, the government allows monopolies where it makes sense. This can be found often in the utility industry. As a tradeoff, local public utility commissions are formed to make sure the monopoly doesn't abuse its power.
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