Economic theory suggests that government-operated monopolies will:

a. Be highly efficient and follow policies that are in the consumers' interest,

b. Be dominated by persons who, while seeking to serve the public interest, are not hardnosed enough to run a business efficiently,

c. Be inefficient because of poor incentives for operational efficiency.

d. Favor the consumer at the expense of special interest groups in and out of government.

Government corporations and agencies that are the sole providers of a particular product constitute state monopolies. Laws prohibit other players in the market, preventing competition. This is a monopoly that is created by the state. A natural monopoly, on the other hand, occurs when high costs such as infrastructure prevent the entry of new firms. Government monopolies are aimed at protecting consumers by allowing firms to experience high economies of scale, lowering the prices of goods and services. They also protect innovative ideas and other inventions by granting patents and copyrights. Economic theories suggest that government-operated monopolies will be dominated by persons who, while seeking to serve the public interest (such as employing a larger number of workers than is required), are not hardnosed enough to run a business efficiently (b).