Economists argue that government regulation is often beneficial to businesses that are regulated. Economists argue this because government regulation:
often prevents other people from entering the regulated industry. makes markets contestable. reduces barriers to entry. allows the law of comparative advantage to benefit firms.
In the past many economists have suggested that regulation rather than antitrust is a more appropriate government response to monopoly when:
special interest groups are especially influential in shaping government policy. monopoly develops because of economies of scale.. when the forces of "creative destruction" are evident.. anti-trust laws are ruled unconstitutional.
