Natural monopolies | ECON 1002 – Microeconomics | Walden University

 A natural monopoly is an industry in which the most efficient number of firms serving the market is one. Generally, these industries have substantial fixed costs that generate large economies of scale. For example, consider a local water service provider. If only one provider serves a residential area, only one set of water mains/pipes are needed. If multiple providers serve the area, multiple mains/pipes are needed, likely doubling the cost of providing the same degree of water service to the neighborhood. Typically, investor-owned natural monopolies deemed providers of essential services to a local area, such as local water, natural gas, electricity or garbage companies, are regulated by a Public Utilities Commission (PUC). The PUC normally sets prices or tariffs the utility is allowed to charge, equal to cost plus a normal return on investment.

In this Discussion, you will revisit an industry from the Week 3 Discussion and discuss which type of market structure it is, how firms in this industry compete, and whether or not some firms can profit in this industry in the long run.

To prepare for this Discussion:

  • Review this week’s Learning Resources.
  • Review an industry that either you or one of your colleagues identified for the Discussion in Week 3, and consider which of the three market structures included in this week’s Learning Resources (monopolistic competition, oligopoly, or monopoly) best characterizes the industry.
  • Review the Academic Writing Expectations for 1000-Level Courses, provided in this week’s Learning Resources.

By Day 3

Post a 150- to 225-word (2- to 3-paragraph) explanation of your selected industry’s market structure, including support for your assertion. In your explanation, also address the following:

  • How do firms compete with each other in the industry, both in terms of price and non-price competition?
  • Are some firms in the industry able to earn economic profits in the long run? Why or why not?
  • To support your response, be sure to reference at least one properly cited scholarly source.

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more