Why Many Utilities Are Allowed to Have Monopolies

Why Many Utilities Are Allowed to Have Monopolies

Why Many Utilities Are Allowed to Have Monopolies

03/31/21

“Why is it that many utilities are allowed by their regional government to have monopolies?”

Although monopolies are often talked about as being an intrinsically bad thing, many governments, particularly more social-democratic ones, grant utilities a monopoly on serving a specific area. Why is this the case? Well, it all comes down to the fact that utilities provide critical infrastructure such as electricity and water, and that it is usually most optimal to have only one service provider in an area as a natural monopoly. This is Why Many Utilities Are Allowed to Have Monopolies.

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