Which statement best describes a competition policy response to monopolies?

• A. Monopolies Are Expected in Certain Industries
• B. Government Keeps Nationalised Industries to Avoid Customer Exploitation
• C. Industry Regulators May Be Set Up if Regional Monopolies Unavailable
• D. Collusion by Companies Leads to Inflated Prices

Answer: (C)

When competition policy encounters a market with limited competition, a practical response is to regulate that market instead of trying to force competition. Setting up industry regulators for monopolies helps protect consumers by overseeing prices, ensuring fair access to the market, and maintaining service quality. Regulators can impose rules or price controls and require access for new entrants, reducing the harm from lack of competitive discipline. This approach directly reflects how competition policy can address monopolies, unlike statements about expected monopolies, nationalisation, or the problem of collusion, which describe situations or remedies outside the typical regulatory response.