Overview
Natural monopolies are a unique market structure where a single firm can supply a product or service more efficiently than multiple competitors due to high fixed costs and low marginal costs. This often occurs in industries like utilities, where the infrastructure required is expensive to build and ...
Key Terms
Example: A local water company that is the only provider in the area.
Example: A factory producing 10,000 units may have lower costs per unit than one producing 1,000.
Example: Perfect competition, monopolistic competition, oligopoly, and monopoly.
Example: Government setting price limits for electricity.
Example: Electricity and water services.
Example: If producing one more unit of electricity costs $5, that is the marginal cost.
Related Topics
Oligopoly
A market structure with a few firms dominating the market, leading to limited competition.
intermediatePrice Discrimination
The practice of charging different prices to different consumers for the same product.
intermediatePublic Goods
Goods that are non-excludable and non-rivalrous, often provided by the government.
intermediateKey Concepts
Economies of scaleMarket structureRegulationPublic utilities