A note from Daniel

Monopolies can be positive, though, when significant investment needs to be made to develop and supply a product in the first place. One example is utility companies. It costs a lot to create the infrastructure needed to provide sewage treatment or electricity. This type of monopoly often develops into a natural monopoly, which occurs when an industry has steep barriers to entry. These barriers—such as significant physical infrastructure requirements--make it daunting for new competitors to take on established players that are already operating at a large scale. When natural monopolies of providers of essential goods or services occur, governments may intervene to ensure prices remain affordable.,

Daniel The Great Mental Models, Volume 4, page 140 · December 23, 2024 Save to shelf
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