Since it is widely believed that individual firms lack the perspective to protect society, government regulation of key industries may be needed. This is particularly true when firms have monopoly power, meaning that a single firm or a few firms control an entire market.
In markets where there is sufficient competition, however, the marketplace itself can regulate firms. In the market for new cell phones, for instance, there is no regulation regarding what features the phone should have. The features provided are regulated completely by consumer demand.
