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Homework answers / question archive / In microeconomics: is it necessary to regulate the naturally occurring monopolies that exist in the market today?

In microeconomics: is it necessary to regulate the naturally occurring monopolies that exist in the market today?

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In microeconomics: is it necessary to regulate the naturally occurring monopolies that exist in the market today?

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Yes, that should be the case, because, without regulation, it could happen that those naturally created monopolies could have a negative impact on the consumer surplus, as consumers become dependent on that firm, and the country as a whole tends to lose, as production and consumption could be away from a level of balance that is not optimal for any economic growth. So, through regulation, some leakage of the economic growth surplus may be restricted by the government. Regulation should have a limit, however, otherwise, it could have more negative consequences.