1. pls see details?

Question

1. Give an example of a government created monopoly. Is creating this monopoly necessarily bad public policy? Explain.

Answer 1

1. Indian Railways.

2. yes.

Whenever a business is a monopoly, it will tend to operate in the interests of its workers, especially its administrative workers (bureaucrats), rather than of the users of its service.

Occasionally, something is a "natural monopoly" ie to have competition would only duplicate provision with little or no benefit to the consumer, and then the best choice is a regulated monopoly (e.g. Thames Water).

Answer 2

Public monoplies are like the phone and cable companies used to be, and the power company still is in most places.

There are some economists who always argues against such monopolies, but generally the opinion was in favor of these regulated monopolies until technology rendered them obsolete (ie, phones with cell phones).