On their exam, students must answer a question like the one below:
How did AT&T obtain a monopoly in long distance telephone service?The 1982 anti-trust case against AT&T was really one branch of government (federal court) telling another branch of government (FCC and congress) to stop supporting this monopoly. The consequences of this case is an entirely different matter.
a) AT&T charged prices so high that no competitors could make enough profit to attract investors.
b) The federal government believed that communication was so important that AT&T should have a monopoly and regulated the market accordingly.
c) A band of outlaws enforced AT&T’s patents even after they officially expired.
d) None of the choices are correct.
When one focuses on the facts, it becomes obvious how real monopolies are created.