![]() ![]() (Fixed costs are those that remain the same regardless of the number of goods or services produced. This generally happens when the industry involved has extremely high fixed costs. Natural Monopoly DefinitionĪ Natural Monopoly occurs when it makes the most sense, efficiency-wise, for only one firm to exist in a given sector. In the United States, the Federal Trade Commission ( FTC) is in charge of regulating monopolies. Natural monopolies are a specific variant of this situation. ![]() For example, De Beers is known to have a monopoly in the diamond industry. ![]() However, from a regulatory view, monopoly power exists when a single firm controls 25% or more of a specific market. Most of us are well-acquainted with the idea of a monopoly: when there is only one firm prevailing in a particular industry.
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