{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

In practice - Inpractice,.Forinstance, , profit,.

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
In practice, pure monopolies are very rare. For instance, a supermarket may be the only  food supplier in a particular town, but if it raises its prices and retains too much of a  profit, a competitor may enter the space. Even the threat of serious competition entering  the market forces the existing firm to act conscionably, and differently from how it would  act otherwise. A train company may be the only carrier in a particular station, but if cars  are also available in the area, there exists a close substitute to the output good.  Natural Monopoly  A natural monopoly is a firm with such extreme economies of scale that once it begins  creating a certain level of output, it can produce more at a far lower cost than any  smaller competitor. Natural monopolies exist far more frequently than pure monopolies,  mainly because the requirements are not as stringent. 
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern