adequate air transportation infrastructure. No, I believe that all natural monopolies should be regulated . This is because without regulation, natural monopolies would set higher prices to earn positive economic profits because they are the only company that can provide the service. Both workers and consumers would have to pay the price. Natural monopolies are uncontestable and firms have no real competition. Due to a high barrier to entry, competition would not last long. Deregulation only promotes competition in the early stages. Due to economies of scale, in the later stages rivals will be driven out of business and competition will be eliminated. This would lead to the natural monopoly becoming a real monopoly. Due to economies of scale, it is also more efficient and cheaper for a natural monopoly to produce all of the industry output compared to many small firms producing a fraction of the output. An example of a natural monopoly is tap water. It is more efficient to have just one company providing a network of water pipes and sewers because there are very high capital costs involved in setting up a national network of pipes and sewage systems. If there are two different companies offering water, the average cost of water would be very high compared to just one as there would be two different networks of pipes.