Question

be original and use your own words

Give an example of a government-created monopoly. Is creating this monopoly necessarily bad public policy? Explain.

Answer 1

The government created a monopoly is the situation in which the government allows only one organization to operate in the given industry to offer the products or services. A typical example of this type of monopoly can be seen in the form of The United States Postal Service. This service was created as per the law and other competitors were not allowed to provide services such as first-class and standard mail delivery.

It is not always bad to create a monopoly through the government. These types of monopolies are mainly created to protect the interest of the nation and the common public. This is mainly important in those economies where free-market competition may harm the common customers.

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