What will most likely happen is (b) followed by a revolution followed by (a). The transition to a post-scarcity society is a fundamental economic change, and it will inevitably have to lead to a radical transformation of the political system, as well.

Seriously? We are talking about grocery stores. Where I live there is a VONS, Smith's and Albertson's literally within 2 miles of my house and there was still room for newcomers like Fresh & Easy and a dollar store to open recently to serve niche markets. Everywhere I lived there were many choices of grocery stores. Perhaps in a small 'one store' town a company can get away with abusing its position for a time but the more they charge the more they open the door for competition.

It's not about turning a profit, it is about efficient operations. In case of private companies there is an obvious incentive to run a tight ship. In public companies the only incentive for the bureaucrat in charge is not to screw up in a particularly public way that might cost him his job, while cashing in his power in a variety of ways through the deals with suppliers, unions, and a million other ways.

In a truly deregulated market, the cost of entry for one cable company would be the same as for another. In a heavily regulated market that we actually have (at the local level) the first company had a very much lower cost of entry due to special deal with the local government.

Except that monopolies are almost always created by regulation.

In the town I live in, precious few grocery stores aren't the HEB brand. There is no real competition for them and they gouge.
 
Why is there no competition for them? Is there something stopping another chain from opening a store and charging slightly less and taking all their customer?
 
  In the neighborhood I life in, I can't get FiOS and the AT&T DSL options are a joke (they won't bother putting in capacity). So if you want anything but *shudder* dialup, your options are Warner, Warner, or... Warner.
 
Again, why are there no other choices of Cable providers? Typically, there is local regulation that makes it is a legal nightmare as well as a huge initial cost for a second company to come in. Everybody has access to poles, a company "only" has to run its own wires and presto, you have a second provider. The only problem with this is that running lines carries an enormous up front cost, which made sense to the first one to come in due to the deal with the local government (regulation again, which typically included monopoly access for a number of years as part of the deal) but it doesn't make financial sense for a new company.
 
The problem is how to incentivize companies to come into markets "owned" by an existing provider: 1) simplify legal process of getting necessary permits 2) Offer incentives like those offered to the initial company - something you should take up with your local government. 3) If the current provider is really "gouging" the customers, it should be no problem for the newcomer to offer a better deal and still be profitable

There is no oversight in clothing market and yet you can buy a shirt at Wallmart or Ross for $5 or shoes for $10. Why don't they charge $100 for a shirt and keep the difference? It is not government oversight that drives prices down but competition. Telcos are not a good case study of either free market or regulation as they are a special case in a lot of ways.

Points deducted for not mentioning Koch brothers though.

They can run with a zero margin
 
They can run with huge losses too which is usually the case (see USPS, every form of government run public transport, most public utilities) and no shareholders exist to whine and bitch, only voters who have no direct way to hold the management accountable the way shareholders do and plenty of conflicting interests from industry, unions etc competing for management (i.e. government) favors through "donations, lobbying and election time favors (union busing etc). European government run utilities are making literally hundreds of billions in losses, made up by the taxpayer. Even very popular government run services like London Underground make huge losses every year and have to be subsidized.
 
It's an interesting psychological phenomenon that people will agree that the government is incredibly corrupt institution in certain areas close to their heart (in case of slashdot, privacy rights, lobbying/bribery by music/movie industries etc) and at the same time want to give government more and more power in areas that they don't understand as well (healthcare, industry regulation, public utilities). Guess what, the government is just as corrupt in those areas too.

When everything is automated, the notion of money becomes rather nebulous to begin with. Money represents scarcity of resources, including productive labor. If labor is no longer scarce, it cannot be tied to money in any meaningful way anymore.

If robots can pick up trash, why humans should be forced to do so?

Every dictatorship is based upon altruism at it's core. It starts as "you should sacrifice for others", then morphs to "you *will* sacrifice for others", then finally moves to "you will sacrifice for others even against and beyond the best interests of you and your family".

Altruism compelled by the State is collectivism, and collectivism in it's many & various forms never works well as a pillar of government and/or society. Collectivism insures everyone is forced to the lowest common denominator and results in the only things it actually succeeds at making equal...poverty, tyranny, and suffering for all.

Strat

This is only reasonable within the traditional capitalist framework where everyone has to work to earn their living. When you cling to that framework, as automation and other technological advances reduce the number of people required to efficiently create some product or perform some service, you have to introduce artificial inefficiency into the market so as to "create jobs". This is basically a form of the broken window fallacy, and, as such, bullshit. We need more efficient processes, and if that results in less workforce being utilized, well, perhaps it's time for universal basic income guarantee?

What evidence do you have that the government will do a better job or be less corrupt than the private companies? Or is government a default solution to every problem regardless of its own (numerous) problems?

If all you say is so true, then why all Republican candidates in the 2012 primaries were pandering to extreme social conservative wing so much?

The only reason why corporations don't have army of their own to buy with all that money is because we don't let them through our government.

(In fact, even that's not quite true, as there are numerous examples of corporate mercenary armies in Third World countries.)