Natural monopolies are often regulated: they cannot charge a higher price without government approval.
Thus, average total cost is always declining and the minimum efficient scale is much larger than the size of the market. Natural monopolies: Goods and services whose delivery requires the construction of a physical network (wires, pipes, etc.) In such industrial (local phone service, water sewage removal, electricity, gas) the physical networks display decreasing marginal cost over essentially all quantities. Economic and/or legal restrictions, strategies or situation that make entry more difficult for new competitors than for the existing monopoly firm. Patents, copyrights, licenses, franchises: government protection of a firm’s to produce a unique product. Perfect competition, monopolistic competition, oligopolistic, monopoly ( numbers of firms, price ) Sources of monopoly entry barriers: Natural monopoly: the most efficient scale of production is so large, relative to market demand, a single firm dominates the market. When you have a monopoly you can ask any price you like. Definition of monopoly: A market in which there are many buyers but only one seller. Issues in monopoly Is monopoly good or bad ? References. Natural monopoly and the firm single source suppliers. Transcript: Hessa Azza Asma Khulood contents The definition of monopoly.
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