Answer No: 1) Natural monopoly exists in Pakistan Railways because this department is kept in

public control. Government has not privatized this industry and has been managing this industry under
its own control. So technically, no other company can enter the industry because a company would
obviously need a license to operate in the Railway industry of Pakistan. However there have been recent
examples of railways operating under the private control in Railway Industry of Pakistan, but they also
get license and pay fees to government controlled department Pakistan Railways in order to run their
business in Pakistan. So this is how there is monopoly of Pakistan Railways which would only end if
government decides to privatize the industry.


Answer no:2a) In Ireland in the 1930s, wed recently achieved some independence (but
were still in the Commonwealth). The countries economy was in a poor state and people
were obviously very resentful towards Britain. So the government gave monopolies to
certain companies in certain markets e.g. car parts in order to try and improve public
opinion. Obviously what happened didnt help the country. Poor prices, poor quality and no
incentive to improve products meant that the economy relied on agriculture for decades
after...

However the best example of a monopoly destroying an entire country is the Democratic
Republic of Congo. It achieved independence from Belgium in 1961 I believe. The Belgians
treated the locals like dirt for centuries and only wanted the country for its rich resources.
They had set up a mining company called Union Miniere which was the only mining
company in the country. This company was very very valuable since the Congo was rich is
diamonds and minerals.

When independence was granted, violence broke out in the country. Patrice Lumumba was
the Congan president at the time and was a decent leader who wouldve lead the Congo onto
better things. But the Belgians were afraid that he would (rightfully) take over and
nationalise Union Miniere. The US were annoyed because he seeked Soviet help in stopping
a rebellion in the country. So the US and Belgians conspired against him and he was killed
by rebel leaders and a CIA shell was appointed President (who went on to destroy the
country).

Basically Union Minere ,which had a monopoly in the Congo, was the sole reason for the
Belgians meddling in the Congolese affairs. This meddling led to the Congo becoming what
it is today. So basically Union Miniere became powerful and valuable enough to destroy the
first Congolese government.

Monopolies are very bad for consumers but in the vast vast majority of cases they do not
come close to threatening governments
Answer2b) For this case we have the example of Chinese society where Chinese
government had kept the financial sector under its control so basically there was monopoly of
Chinese government in the financial sector of China. So how it used to operate is that
government used to announce the favorable areas of industry, and then the government used
to support those industries by issuing loans and providing capital to businessmen who wanted
to operate in those particular industries. This is how by the passage of time Chinese
government developed different industries which brought employment and capital to the
Chinese economy and proved to be beneficial for welfare of the society.

Answer 3 1) : kesc
Answer 3 2) : Airlines
Answer 3 3) : mobile phone markets




Answer 4) : free markets are supported by neoclassical school, and Austrian school.
Perfect competition is a theoretical model where free markets work perfectly. Other schools do not
reject it, but just feel it is not applicable to any real-world industries.