Question

Public policy toward monopolies Suppose that there is only one provider of a service in a state. Because this provider experiences economies of scale, the government does not want to break it into smaller pieces, but it does want the provider to supply the efficient quantity.

Answer 1

Regulate the firm's pricing behaviour.

Step-by-step explanation:

The government does not want to split the business down into smaller pieces but needs to provide the supplier with the productive amount, so the Government regulates the expense conduct of the product.

A price limit that a monopoly can charge the consumer is a government-imposed example of the way monopoly behavior can be regulated. This will allow the organization to produce productive volumes.

For Example, The market power in monopolies is greater than that of competitive markets. In price capping, quality criteria and stopping monopolies to expand, the Government can regulate monopolies.