Monopoly:Market Failure :: Government Intervention:?

Monopoly is a situation where a single company controls the entire market for a product or service, often leading to higher prices and less choice for consumers. This is considered a market failure because it does not allow for fair competition, which is essential for a healthy economy. In response, government intervention aims to correct such failures by regulating or breaking up monopolies, ensuring that consumers have access to affordable options and that businesses can compete fairly. For example, if a utility company has a monopoly over the electricity supply in a town, the government might step in to set price limits or encourage other companies to enter the market. This helps create a more balanced market where consumers benefit from lower prices and better services.