Express your opinion on how you would feel about government regulation and intervention on your own monopolistic firm.

Question

After identifying a monopoly you are now an acting owner of a monopolistic firm. Express your opinion on how you would feel about government regulation and intervention on your own monopolistic firm. Identify as a consumer, who is benefiting by the government regulations on monopolies. Then express both points of view in a typed response 3-5 sentences.

Answer 1

As a monopoly, government regulation (say taxes) reduces my market power. Although I can adjust prices given my new production plans, the profitability would be reduced forcing me hire less workers and focus on consumers who are willing to pay premium prices. As a consumer, I get access to lesser to lesser quantities and remain available to those seeking to pay premium prices.