Features of a Natural Monopoly Market or Company
After reading the two articles (and the recommended reading if interested), please take two to four sentences to respond to one question (identify which).
What features of a market or a company make it a “natural” monopoly? Does this mean such monopolies are ethically good?
Taplin emphasizes a relationship between AT&T’s telephone network monopoly and the innovation of Bell Labs. What industries do you think have more product innovation: those with a monopoly or those with many competing firms? Why?
What can a now-dominant company like Google do in the market to maintain its position of dominance? What can it do in its nonmarket environment?
Give at least example one of “creative destruction” beyond those given by Wolfe. Why were new market entrants able to succeed, and why did incumbents fail?
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What features of a market or a company make it a “natural” monopoly? Does this mean such monopolies are ethically good?
A natural monopoly arises when there is a demand for exclusive services or products in a certain geographical location. The contributing factor is the high capital required for startup and sizeable economies of scale, which a single entity can efficiently offer. Some markets gaps such as water supply, technology, and electricity demand the presence of natural monopolies for affordability.
Dominance over a single network is one of the leading characteristics of natural monopolies. For instance, trends indicate that the popular ones have established control in specific industries that provide essential utility services such as electricity, water supply, and power. These areas demand high amounts of capital to start. As a result, they cannot allow competitio...
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