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 Originally Posted by BananaStand
they are absent. Using the same example of the electric company....there is no competition.
If you're gonna say that light bulbs are competing with candles, just GTFO. There's ONE electric company and it controls the only existing infrastructure to deliver electricity.
Without competition, and without a better way to get electricity, power is removed from the consumers and given to the electric company. Maybe they don't do anything with it. But maybe they do. Maybe they decide that people are gonna just buy the electricity no matter what, so why not charge double??
Competition is a market force that would prevent that. It's missing. So the government restores the balance of power through oversight/regulation.
The existence of a direct competitor is not a necessary condition for the market forces to be working. Indeed a market might function best with only one firm in it all the while market forces would be working.
Why doesn't the electric company just charge double? I answered this in two different ways on my post above yours and the one a couple days ago about roads and trains. There are a bunch of market forces in play if a monopoly doubles its price.
The typical effect of oversight by government is to reduce those market forces due to the unintended consequence of the oversight reducing profit expectations for potential entrants, increasing cost, and criminalizing innovation.
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