Answer to Question #208046 in Microeconomics for Banzie20

Question

briefly describe how governments are involved in creating monopolies (10 marks)

Answer 1

The government can create a monopoly by granting exclusive rights to a single organization to produce a particular good.

The government also provides sole ownership of inventions through patent laws, which aims to reduce market failure in those sectors.

The government also establishes a monopoly by holding exclusive rights to a certain commodity.