A company may be the only provider of a product or service in an industry or location. Natural monopolies can occur in industries where raw materials are needed. The market is always open for competition, but when a company has a monopoly, there isn’t any competition to speak of.Īlso Read: 12 Welsh People Physical Characteristics and Traits What Is a Natural Monopoly?Ī natural monopoly is a company that dominates and controls an entire sector of the market because of the nature of the market.
They own the market without other companies competing for the same status. When a company achieves this, there is a possibility they may engage in high-cost pricing for their product. Which industries are examples of natural monopolies?Ī monopoly occurs once a company dominates and controls an entire sector of the market.What is an example of a natural monopoly?.Advantages and Disadvantages of Natural Monopolies.
