MONOPOLY

Natural Monopoly

[Name of the Institute]

Natural Monopoly

Introduction

The concept of natural monopoly was defined in 1974 by Richard Posner, an economist who studied the regulated monopolies such as potable water, electricity, the telephone system and cable TV. Government still favors free enterprise when they can tolerate or regulate monopolies. In the U.S, the natural elements have been justified and acceptable in a traditional system of free enterprise. A natural monopoly is allowed when the demand is met economically and efficiently by a single producer, when the competition results in duplication, the investment is wasted, and consequently fails to operate as a regulatory mechanism.

Discussion

A ...