government monopoly economics definition

#Government monopoly economics definition free#

This is especially the case if the state monopoly controls access to vital inputs essential to operating within the market. Therefore, this results in using its market dominance and influence to its advantage, in affecting how the market evolves over a long period of time.

#Government monopoly economics definition free#

These activities have a major influence on the operational environment, when its trading activities are not subject to competitive forces inherent within free trading markets. This occurs when its business activities exert an extensive influence within the market, can act autonomously of any competitors, and potential competitors are unable to successfully compete with it. The term state monopoly usually means a government monopoly run by the national government.Ĭharacteristics of state monopolies Ī state monopoly can be characterized by its commercial behavior not being effectively limited by the competitive pressures of private organisations. It is usually distinguished from a government-granted monopoly, where the government grants a monopoly to a private individual or company.Ī government monopoly may be run by any level of government-national, regional, local for levels below the national, it is a local monopoly.

It is a monopoly created, owned, and operated by the government. In economics, a government monopoly or public monopoly is a form of coercive monopoly in which a government agency or government corporation is the sole provider of a particular good or service and competition is prohibited by law. Government control of an industry or economic sector