Econ 3 PPQ: Monopoly and Welfare

‘Most people would say that the ending of the BT telephone monopoly, and competition in the telecommunications market, have been beneficial. However, Britain’s railways show why some monopolies should not be replaced by a number of competing firms.’

Evaluate the view that consumers are always better off and producers are always worse off if monopolies are broken up to encourage as much competition as possible.

(25 marks)

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