Natural MOnopoly

definition

• a market that runs most efficiently when a lg. firm supplies all the output

Examples

• The utilities industry 
• The cost of establishing a means to produce power and supply it to 
• -each household can be very large
• The capital cost is a strong deterrent for competitors 

examples continued

• Railways 
• Cost of laying a track and building a network
• Buying or leasing trains
• running a rival network would be wasteful

How this benefits society

• Having multiple firms operating in a these industries is economically 
• -inefficient 
• Making it a simpler choice