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What is the usual rationale for governments to issue monopoly-promoting licenses to firms providing services such as trash collection

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User DSteman
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1 Answer

2 votes

Answer: Economies of scale

Step-by-step explanation:

Economies of scale are the cost advantages i.e the reduction in cost which a company benefits when there is efficiency in production. This is possible when there is a rise in production.

Therefore, the rationale for governments to issue monopoly-promoting licenses to firms providing services such as trash collection is due to economies of scale as this will help in reducing the cost and also allow one main company to do it more efficiently and effectively.

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User Elky
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