Natural Monopoly Case Write Up assignment

Mar 30th, 2015
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Natural Monopoly Case Write Up assignment

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Natural Monopoly Case Write UpNameClassDateProfessorNatural Monopoly Case Write Up A monopoly is simply when one business dominates a particular industry while the natural monopoly is when the cost of the goods or services can be provided at a lower cost by one particular producer in the market. A natural monopoly is when a business has a strong economic position and is where the fixed cost of the capital good is extremely high making it unrealistic for another company to try to compete. While businesses are not supposed to monopolize a particular industry in some cases it is economically necessary to have natural monopolies in society. These natural monopolies, however, are strictly regulated by the government. Utility companies are a type of natural monopoly with an example being a natural gas company. Because natural gas is difficult to obtain without extensive cost, equipment, and even political support this type of monopoly can be necessary because other businesses cannot take on this high expense. Secondly the business could not afford to provide the same lower price the original natural gas company and would not be able to adequately compete. Despite the need for natural monopolies when it comes to utilities companies other utility industries, such as telephone, cable or broadcasting companies these companies are highly regulated by the government. The natural monopoly when dealing with phone, cable, and broadcasting companies

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