Question

Write two ways that the free enterprise system works to break the three powers noted of monopolies (Higher prices, Barriers to entry,and Reduced Competition).

Answer 1

In a truly free market society where the government does not artificially create monopolies then there will exist natural monopolies which are the result of consumers valuing the product of one service provider over the other. These natural monopolies have no government support to maintain their monopoly status. If their product fails to meet consumer demands then there will exist an opportunity for competition to enter the market. Without government regulations hindering the process the costs of goods can be naturally lowered through competition and natural monopolies.