Government Intervention to Market Failure

strategic allience, having patents,, inventing new technology etc are some cases were monopolies are found monopoly is a situation where there is single seller and he obviously since everything is in his hands doesnt consider demand and supply mechanism Govt intervention in case of monopoly : Govt can bring up predatory pricing policy to protect interest of small traders, anti competetion policies , regulate prices so that monopolies dont exploit

Harshitha Kalidindi

CA Inter

★ 45K+

04-Feb-23 21:39

That is correct...but there is a line in module which says, "market power is exercised by either sellers or buyers" - you have explained very well about seller but I wanted to know how buyers can exercise monopoly

Thread Starter

Jatin Vaishnav

CA Inter

★ 2K+

05-Feb-23 09:58

Take the case of Indian Railways. They are the only buyers of locomotives. They can influence the potential sellers and dictate terms to the sellers. Same happens in case of defence where there is only one buyer.

CA Suraj Lakhotia

Admin

06-Feb-23 17:53

Thank you sir...got the perfectly needed example

Thread Starter

Jatin Vaishnav

CA Inter

★ 2K+

06-Feb-23 22:10

This might not mean individual buyers, but when you are the only buyer you can exercise some powers. if there are multiple buyers, all should co - ordinate together for purchase, then also this is possible

Deepak S

CA Final

★ 6K+

09-Feb-23 15:20