natural monopoly

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Natural Monopoly

A situation in which the barriers to entry for an industry or product are so high that it is not profitable for a second company to make an attempt. For example, an area may have only one utility company because it is prohibitively expensive to start another one. Governments generally regulate profits for natural monopolies to protect consumers.

natural monopoly

a situation where ECONOMIES OF SCALE are so significant that costs are minimized only when the entire output of an industry is supplied by a single producer so that supply costs are lower under MONOPOLY than under conditions of PERFECT COMPETITION and OLIGOPOLY. The natural monopoly proposition is the principal justification for the NATIONALIZATION of industries such as the railways. See MINIMUM EFFECT SCALE.
References in periodicals archive ?
All across America, incentives for collusion between electric utilities and the agencies set up to oversee them are built into the regulatory system itself, which operates on an assumption that utilities are "natural monopolies." This is crony capitalism at its most flagrant.
Strong network effects create natural monopolies - industries where competition tends to vanish on its own.
The first is the situation of natural monopolies. (70) The second is the potential problems antitrust law could cause in high innovation fields.
For the purpose of this article, public utilities are natural monopolies
Draft protocol to the treaty determines the specific terms of accession of the Kyrgyz Republic to the Eurasian integration, including trade in services, regulation of natural monopolies, transport policy, rules for industrial subsidies, and other.
Our observations from the Estonian publicly owned natural monopolies in several sectors do not suggest different behaviour patterns compared to privately owned ones.
Another basic act regulating the power is the Law on Natural Monopolies, which has since been amended.
ASTANA (CyHAN)- The cost of a liter of AI- 92 petrol has been increased up to 115 tenge (153.72 tenge = $ 1) in Kazakhstan since October 25, the Kazakh Agency for Regulation of Natural Monopolies reported on Friday.
Kazakhstan's Samruk-Kazyna National Welfare Fund Head Umirzak Shukeyev offered the Kazakh Agency on Regulation of Natural Monopolies an opportunity to withdraw activity of oil export and transit subjects from being regulated.
As part of the debate over the governmentaACAOs recent plans to freeze tariffs for natural monopolies, Transneft has detailed its investment programme for 2014-18 (approved by the companyaACAOs Board of Directors on 10 September) and suggested that it might need to be reconsidered down, especially given another initiative to introduce a property tax on pipelines.
"Those include the defects of the energy sector, unemployment, the destruction of nature, and the introduction of an effective regulation of natural monopolies," add they.
Offer to index tariffs of natural monopolies might make a make a significant effect in the form of financial results reduction in the companies of the power energy sector.