Perfect Competition and the Supply Curve & Monopoly Essay

Perfect Competition and the Supply Curve & Monopoly - Essay ExampleFor the electricity industry, attach in business can greatly reduce unit/average costs and that is why intrinsic monopoly is popular in this industry.In most cases, political science might want to regulate natural monopolies such as this one. The regulations to be employed are direct legislation and administrative regulations of prices and entry into the industry (Joskow & Rose, 1989). several(prenominal) reasons exist on why the government might do this. The two major ones are to frustrate consumer exploitation and subjoin in the unit/average cost of production. Since, in natural monopoly there is abruptly no competition, the monopoly can sell its products at any price. This could result to consumer exploitation hence attracting the interest of the government to regulate monopoly. Moreover, since such industries have no competition, other investors might venture into it to break the monopoly. By doing this, the y would increase the cost per unit hence rendering production uneconomical. The government will therefore step in to regulate their operations with an interest of saving the