This essay will argue that without government intervention, large companies in Australia can become monopolist and abuse the power, therefore the society has to comply with the regulations and run the business within certain boundaries. The government takes care of the society and ensures that all businesses meet the needs and wants of customers and act within legal frameworks. The following information will examine the consequences of monopoly power. The government should impose the regulations in order to regulate business activities because it is the main objective of every State which is concerned with the well-being of the society. The policy regulations assist and encourage the commencement of new businesses by limiting the foreign competition, imposing lower taxes and providing incentives to entrepreneurs’ to run the business. In some cases government can free businesses from the taxes. There is a social belief that due to economic intervention people has to give up some of their rights because government interference is taking away the freedom of individuals by establishing the regulations. However, free market causes Inequity in income and wealth and the government intervention is required in order to redistribute the money within the society. One of the most important functions of the government is to avoid the monopoly in the state and encourage the competition in a free market. Without the government intervention big companies can use monopoly power, charge high prices and exploit the labor. This will lead to allocative inefficiency and the decrease in the consumer welfare. When there is no competition, there is no development because the particular company does not aspire to provide better services and goods. Hence, the quality of these products will not improve because the company will not have incentive to offer customers’ better options and greater quality. Government solves this issue by creating the competition i