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Government Monopolies

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Most monopolies (post office, local water company, cable TV provider, local electric company, local gas company, etc.) are created (or sustained) by governmental legislation.

Why do we condone or establish such monopolies?

What happens when we change our mind? Specifically, AT&T had a governmentally endorsed monopoly over long distance telephone services until 1984; what happened after that break-up?

What other monopolies could we/ should we break-up?

Or are there products that are now produced by oligopolists, like crude oil (for auto gas), that should be made into a government monopoly (as many countries have done, Mexico, Russia, Ukraine, et al).

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Solution Summary

Government legislation monopolies are examined.

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So, historically monopolies were created to address pricing problems. The idea behind creating a monopolist is that the monopolist can take advantage of charging a price no greater than it's marginal cost. This is done if it is impractical to have a competitive market, which is common in the case of utilities ...

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