What are the government's options regarding monopolies? Do you think the Justice Department made a mistake in breaking up AT&T? What if anything would you have done differently? Where do you think this industry is headed (will it be monopoly, oligopoly, or monopolistically competitive and why)?© BrainMass Inc. brainmass.com October 17, 2018, 1:16 am ad1c9bdddf
Governments can approve a monopoly or they can force the breakup or division of a monopoly into smaller, autonomous organizations. Governments cannot provide all services and needs of people so companies such as power companies, utilities, and other local types are approved for doing such work. The government owned postal service is a monopoly, though it has some competitors, the delivery of mail is usually thought of as only the work of the Post Office. In this case, the government has moved to limited privatization and in many countries, only limited competition of specific ...
A discussion on the government's role in the breakup of AT&T, if it was correct and government options on monopolies.
Monopoly and an oligopoly
You have been contracted by a competitor of SBC to conduct some background research on SBC. Specifically, you have been asked to research, compare, and explain the similarities and differences of the breakup of the AT&T/Bell System antitrust problems that occurred in the 1980s to the recently similar problems with SBC/Ameritech. Add to this, the pending acquisition of ATT by SBC.
Explain the difference between a monopoly and an oligopoly, the welfare effects of monopoly, cost advantages that create monopolies, government actions that create monopolies, and government actions that reduce market power.
SBC and ATT are planning to merge. Apply the information from part one of the assignment and explain whether the newly formed company will be a monopoly or oligopoly. What will be the welfare effects, if any, of this merger? What cost advantages might be created? What actions, if any, do you think the government will take?