Question

In: Economics

Topic: Real-World Monopolies Describe an example of a real-world industry or market that would be considered...

Topic: Real-World Monopolies

Describe an example of a real-world industry or market that would be considered by economists to be a natural monopoly.

  1. What characteristics of the industry make it a monopoly?
  2. What is the impact of the monopoly power on its customers?
  3. Why might government want to regulate natural monopolies?
  4. How might such regulation be structured?

Solutions

Expert Solution

A Natural monopoly is a monopoly in an industry where a very high infrastructure cost gives a firm often the first entrant an advantage over other potential entrants and hence gives them monopoly power. An example of a real-world industry or market that could be considered as Natural monopoly is the Water Supply of your area.

The most important characteristics of the industry which makes it a monopoly is that it is the sole supplier of that good or sole provider of that services in your area and you have no other choices to choose from. The other characteristics include high barriers to entry in the industry( infrastructural cost) profit maximization.

Since this industry possesses the monopoly powers so it effects the customers by not giving other choice if they are not satisfied by this firm. This firm may also charge the price according to their choice because they have control over market. They can limit the quantity supplied in the market. Though there is not much impact on customers due to government intervention but there could be many effects other than those mentioned above.

Government want to regulate these natural monopolies because in most of the cases these natural monopolies provide basic and essential goods and services which are very important for people's survival and hence to achieve maximum social benefit or to ensure people are not cheated or people do not suffer, government try to regulate these markets.

These government regulations must be structured in such a way that there is no loss to either parties. Government should ensure the price paid by people is fair and it should also ensure that the monopoly industry do not incurred loss due to government regulation.


Related Solutions

Describe an example of a real-world industry or market that would be considered by economists to...
Describe an example of a real-world industry or market that would be considered by economists to be a natural monopoly. What characteristics of the industry make it a monopoly? What is the impact of the monopoly power on its customers? Why might government want to regulate natural monopolies? How might such regulation be structured?
Describe an example of a real-world industry or market that would be considered by economists to...
Describe an example of a real-world industry or market that would be considered by economists to be a natural monopoly. What characteristics of the industry make it a monopoly? What is the impact of the monopoly power on its customers? Why might government want to regulate natural monopolies? How might such regulation be structured?
Describe an example of a real-world industry or market that would be considered by economists to...
Describe an example of a real-world industry or market that would be considered by economists to be a natural monopoly. What characteristics of the industry make it a monopoly? What is the impact of the monopoly power on its customers? Why might government want to regulate natural monopolies? How might such regulation be structured?
Describe an example of a real-world industry or market that would be considered by economists to...
Describe an example of a real-world industry or market that would be considered by economists to be a natural monopoly. What characteristics of the industry make it a monopoly? What is the impact of the monopoly power on its customers? Why might government want to regulate natural monopolies? How might such regulation be structured? 0
Describe an example of a real-world industry or market that would be considered by economists to be a natural monopoly.
Describe an example of a real-world industry or market that would be considered by economists to be a natural monopoly.What characteristics of the industry make it a monopoly?What is the impact of the monopoly power on its customers?Why might the government want to regulate natural monopolies?How might such regulation be structured?
Provide an example of a real-world industry or market (current or historical) that has not been...
Provide an example of a real-world industry or market (current or historical) that has not been described by another student or that is in the text that would be described by economists as a monopoly (near-pure or natural) and provide a summary of how that monopoly became a monopoly, how it maintained monopoly power, and if applicable, how it lost its monopoly power. Provide a link to your references (Do not use Wikipedia).
Discussion Question, choose one of the following: Provide an example of a real-world industry or market...
Discussion Question, choose one of the following: Provide an example of a real-world industry or market that has not been described by another student that would be described by economists as a natural monopoly. Why might government want to regulate natural monopolies? Find a recent article on how the government is regulating that natural monopoly and provide a summary of that article along with a link to the article. Make sure you know the definition of a natural monopoly as...
choose a real world industry (for example, the auto industry as opposed to a company such...
choose a real world industry (for example, the auto industry as opposed to a company such as Ford) and determine which of the four market structures (perfect competition, monopolistic competition, oligopoly, or monopoly) this industry is most closely related to. Be sure to support your answer by referring to the characteristics that define each market structure.
Choose a real-world example of someone you would describe as a great leader. Examples would include;...
Choose a real-world example of someone you would describe as a great leader. Examples would include; Steve Jobs, Colin Powell, Mahatma Gandhi, Elon Musk, Margaret Thatcher, etc. Prepare a 500-word essay describing their leadership successes as they relate to the "sources and types of power" discussed in chapter 8. Be sure to address their source of leader power (person vs position), type of leader power, and the overall impact of such power upon their leadership efforts. -Power of the Position...
Describe what an ANOVA test is. Compare it to a real world example
Describe what an ANOVA test is. Compare it to a real world example
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT