Government Regulation Against “Monopolies” Only Lowers Our Standard of Living

by Frank Shostak

According to a popular way of thinking, monopolies undermine the efficient functioning of the market economy by being able to influence the prices and the quantity of products. Consequently, this undermines the well-being of individuals in the economy. By this way of thinking, the inefficiency emerges because of the deviation from the ideal state of the market as depicted by the “perfect competition” framework.

The “Perfect Competition” Framework

In the world of perfect competition, a market is characterized by the following features:

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