Traditional examples of natural monopolies

How does globalization lead to greater competition in the market place? What are the implications for market structure in industries opened to global competition?

What is an example of a natural monopoly? Will a monopoly always produce at a profit-maximizing level of output? Explain.

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... by a number of companies (foreign and local), with the weaker ones leaving the market, and each earning zero-economic profits (at least theoretically). If an industry shows increasing returns to scale (seeks standardization), like, for example, computer operating systems, it is likely, as it has happened, that there will be only one company dominating most, if not all, the world market. Such is the case of Microsoft OS. If the industry is consumer brand oriented, like the GAP, Eddie Bauer, etc, there will be many companies trying to differentiate themselves in the market place. In some cases, as is the case of Microsoft OS, but also of Coke and Pepsi, a country might face a virtual elimination of domestic brands.

There are many traditional examples of natural monopolies, including telephone companies, train tracks, water, electric and gas utilities. The main ...