In a historical sense, "Natural Monopolies" have played a large role in the development of the U.S. Why? Consider the market for beer; in the 1980's it was fairly popular to have beer can collections, either full or empty, because every locale had a unique, or a few unique, brands of beers. Yes, that technology at the time featured economies of scale (relative to demand size) and significant transportation costs. Many of the smaller towns featured a unique brand of beer, as well as 1 doctor, 1 bakery, and 1 funeral home. While sentiment often favored these sellers, it was usually an instance of a natural monopoly. Provide a definition of natural monopoly (with citation not from your text, even a url) and put the definition into your own words. Identify an "industry" or a "producer" that is characterized as a "natural monopoly." Fully explain why that industry or producer fits your definition. Is that industry or producer regulated?

 If so, what are the interests of the regulation. Explain why there is an argument, on efficiency grounds, for the creation of a natural monopoly. Identify an example in today's economy of a "natural monopoly." You are not permitted to duplicate an example that another student provided - so yes, there is a first mover advantage here. Explain how the characteristics of that natural monopoly fit your definition of the term.

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A natural monopoly is a type of monopoly that exists as a result of the high fixed costs of operating a network coupled with relative low incremental ... View the full answer