Why Do Governments Regulate Natural Monopolies? In the case of a natural monopoly, market competition will not work well and so, rather than allowing an unregulated monopoly to raise price and reduce output, the government may wish to regulate price and/or output. Why does the government regulate a natural monopoly? Natural monopolies are allowed when
What Is The Government’s Primary Purpose In Its Role As A Regulator *? Regulatory agencies serve two primary functions in government: they implement laws and they enforce laws. Regulations are the means by which a regulatory agency implements laws enacted by the legislature. Which scenario is the best example of how government would act in
What Happens When A Company Becomes A Monopoly? Under a monopoly there is only one firm that offers a product or service, experiences no competition, and sets the price, thus making it a price maker rather than a price taker. Barriers to entry are high in a monopolistic market. Is monopoly good or bad for