Question

A doctor sets up a private practice in small town where he faces no other competitors. In spite of his

Answer 1

Lack of competition can lead the doctor to charge high prices to patients

Explanation:

America's Government has anti-trust legislation to prevent monopolies from manipulating the market, price gouging, and stifled consumer choices. A monopoly is a case when a company that makes a product or a service dominates the market without a similar alternative.

After a monopoly is created, the seller can be led to charge customers high prices because of the lack of competition. A monopoly, therefore, reduces the customer choice. The monopoly is true if there is no alternative on the market at all.

This is acceptable to have monopolies if the customer profits. In some situations, governments may interfere and build a monopoly on delivering a particular railway, transport or postal system to customers.