Prompt:

Economists believe purely competitive markets [without externalities] allocate resources in the most socially optimal manner such that the marginal cost of producing the product equals the marginal social benefit of that product. Monopolies and Oligopolies tend to produce less output and sell at a higher price than purely competitive or monopolistically competitive industries. This ability to control price and total output is called monopoly power. Markets fail to produce the socially optimal amount of a good when monopoly power exists.

Explain why it might be both socially and economically beneficial for governments to regulate the merger activity of firms in highly concentrated markets (Oligopoly markets) such as the wireless phone industry or the cable - TV industry.