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7 pages/≈1925 words
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Mathematics & Economics
English (U.K.)
MS Word
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Government Intervention, Market Failure, Monopoly Power (Essay Sample)


There should be clear evidence of extensive reading on this topic, and critical evaluation of economic theory and empirical evidence.
You could apply the economic concepts and theory, e.g. industry organization (IO), elasticity of demand, etc., to discuss government interventions and the potential benefits from market power.
You are required to provide empirical examples to support your argument.
You are expected to consult a range of reliable resources, e.g. textbooks, academic papers (peer-reviewed).
You should make full use of electronic database available in library to gather relevant information (both theoretical and empirical).
Please do NOT use unreliable internet sources of information, such as Wikipedia.
You are required to use the USIC Referencing Guide to cite and reference the material you have used.
Page 2 of 6
Marking is anonymous. For this reason, ONLY valid student registration number (Student ID Number) should be written on the Cover Sheet and in the header of the essay.
The word-count for the essay is 2,000 words, excluding references or bibliography. The exact word should be noted on the Cover Sheet of your essay.
The essay should be word-processed using Time New Roman or Calibri or Arial with front size of 12 and 1.5 line spacing.


Monopoly Power and Government Intervention
1. Introduction
One of the reasons for the formation of monopolies is the case where a certain organization has exclusive ownership of a rare resource. Monopolies are also formed in cases where the government accords an organization monopoly status. Monopolies are also formed when producers have patents over designs or have copyright over designs or in the event where two competing companies form a merger. This paper examines how monopoly power can be controlled through governmental intervention. The paper objective will be attained through a critical discussion of the various theories on monopoly power.
The paper is divided in to three sections. Section one gives a brief synopsis of the issue and the objectives of the paper. The second part of the paper discusses the various monopoly theories in existence and the application of each theory in regulating the market. Section 2 will also give the advantages and disadvantages of each theory and examine the different governmental interventions in existence. The last section gives a brief conclusion of the theories discussed in the paper.
2:0 Governmental Interventions
2.1 Theories about Monopoly Power
The social and financial risks of monopolies are clear. To deal with the impacts of the large institutions, the government has taken steps, using both laws and court rulings, to regulate monopolies. Though the approaches have been diverse, the objective of curbing market domination has been invariable. One of the questions that have emerged in regards to government regulation is why the need for regulation in a free economy. There are various theories that explain why the government finds the need to regulate firms and each of them is geared towards protecting the consumer from unfair competition. The theories that will be discussed in this section are;
Market failure
Dead weight loss (DWL)
Consumer surplus
Product surplus and,
Societal welfare
2.1.1 Market Failure
Market failure refers to a situation where free markets lack the ability to develop or when they are unable to allocate the available resources effectively.

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