Question

Given the problems associated with​ monopolies, explain why the government grants monopolies in the form of patents and copyrights. What would happen without these government granted​ monopolies

Answer 1

A government-granted monopoly and the monopoly to be served under government is a form of coercive monopoly by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good or service; potential competitors are excluded from the market by law, regulation, or other mechanisms of government enforcement. As a form of coercive monopoly, government-granted monopoly is contrasted with a coercive monopoly or an efficiency monopoly, where there is no competition but it is not forcibly excluded.

Amongst forms of coercive monopoly it is distinguished from government monopoly or state monopoly (in which government agencies hold the legally enforced monopoly rather than private individuals or firms) and from government-sponsored cartels (in which the government forces several independent producers to partially coordinate their decisions through a centralized organization). Advocates for government-granted monopolies often claim that they ensure a degree of public control over essential industries, without having those industries actually run by the state. Opponents often criticize them as political favors to corporations. Government-granted monopolies may be opposed by those who would prefer free markets as well as by those who would prefer to replace private corporations with public ownership.

While monopolies created by government or government policies are often designed to protect consumers and innovative companies, monopolies created by private enterprises are designed to eliminate the competition and maximize profits. If one company completely controls a product or service, that company can charge any price it wants. Consumers who will not or cannot pay the price don’t get the product. For reasons both good and bad, the desire and conditions that create monopolies will continue to exist. Accordingly, the battle to properly regulate them to give consumers some degree of choice and competing business the ability to function will also be part of the landscape for decades to come. In conclusion , to protect the consumer , government issue patents to monopoly's .If there are any no government premit , monopoly's can earn a high relative profits and can misuse the interest of consumer's which can be cumbersome problem for any consumer .