Government actions can lead to the creation of monopolies in several ways. Here are some examples:

• Exclusive rights: The easiest way for a company to become a monopoly is by the government granting it exclusive rights to provide goods or services. Government-created monopolies are intended to result in economies of scale that benefit consumers by keeping costs down.

• Intellectual property rights: Copyrights and patents are another way in which assistance from the government can be used to create a monopoly or a near-monopoly. Because the government grants these rights, it can limit competition and create a monopoly.

• Restricting competition: In rare cases, the government can even allow the companies in an industry to restrict the number of firms in a market, creating a monopoly.

• Regulations: In some instances, the government imposes regulations on monopolies to create a more competitive environment in the market or to make sure the monopoly couldnt charge a higher price which harms the welfare of the people. However, the government can also create monopolies itself.

While governments usually try to prevent monopolies, in certain situations, they encourage or even create monopolies themselves. Government-created monopolies are intended to result in economies of scale that benefit consumers by keeping costs down. However, monopolies can lead to higher prices and inferior products, and the customer service associated with monopolies is often poor. Therefore, the government has tried, through both legislation and court cases, to regulate monopolistic businesses.