5/2/2023 0 Comments Examples of monopoly![]() ![]() is a classic example of a legal monopoly, operating as one until 1982. ![]() Monopolies don’t need to innovate on their products/services or provide exceptional customer service as there are no competitors in the marketplace. However, the biggest disadvantage behind such a monopoly is the lack of incentive to improve the product or service offered and a potential limitation of innovation. Major Disadvantage of a Legal MonopolyĪs mentioned above, a legal monopoly rectifies a number of disadvantages in a monopoly. In a legal monopoly, the government is able to regulate prices and provide the population with widely accessible services/goods, oversee firm operations, and ideally shift the monopoly to act in the best interest of consumers. Legal monopolies arise when a government deems that allowing a single firm as the sole service (or product) provider would be in the best interest of citizens. Legal monopolies can be established through:Ī legal monopoly is a situation in which the government grants a firm to be the exclusive provider of a good and/or service in exchange for the right to be monitored and regulated.Ī legal monopoly is able to remedy some of the disadvantages described above. ![]() In other words, a legal monopoly is a firm that receives a government mandate to operate as a monopoly. A legal monopoly, also known as a statutory monopoly, is a firm that is protected by law from competitors. ![]()
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