We have seen that monopolies, in contrast to competitive markets, fail to allocate resources efficiently. Monopolies produce less than the socially desirable quantity of output and, as a result, charge prices above marginal cost. Policymakers in the government can respond to the problem of monopoly in one of four ways:

• By trying to make monopolized industries more competitive
• By regulating the behavior of the monopolies
• By turning some private monopolies into public enterprises
• By doing nothing at all

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