Competition law Essay Example for Free

Competition law EssayA situation in which a single caller or group owns all or nearly all of the market for a given typeface of product or service. By definition, monopoly is characterized by an absence of competition, which often results in high prices and inferior products. fit in to a strict academic definition, a monopoly is a market containing a single firm. In much(prenominal) instances where a single firm holds monopoly power, the company will typically be forced to divest its assets. antitrust regulation protects free markets from being dominated by a single entity. Explanation MonopolyMonopoly is the extreme upshot in capitalism. Most believe that, with few exceptions, the system just doesnt work when there is only genius provider of a good or service because there is no incentive to improve it to pucker the demands of consumers. Governments attempt to prevent monopolies from arising through the use of antitrust laws.Of course, there atomic number 18 gray areas t ake for ensample the granting of patents on new inventions. These give, in effect, a monopoly on a product for a set item of time. The reasoning behind patents is to give innovators some time to recoup what are often large look for and development costs. In theory, they are a way of using monopolies to promote innovation. Another example are customary monopolies set up by governments to provide essential services. Some believe that utilities should offer public goods and services such as water and electricity at a price that is affordable to everyone.