Further, the industry can't support two or more major players given the unique resources needed, such as land for railroad tracks, train stations, and their high-cost structures. Railroads: The railroad industry is government-sponsored, meaning their natural monopolies are allowed because it's more efficient and in the public's best interest to help it flourish.Telephone Companies: Companies that provide landline services are required to offer households within their territory phone service without discriminating based on the manner or content of a person’s phone conversations and are in return generally not held liable if their customers abuse the service by making prank phone calls.A natural monopoly can occur in two ways: First, when there are high barriers to entry in an industry, such as large capital requirements needed to buy fixed assets. Regulations over natural monopolies are often established to protect the public from any misuse by natural monopolies. In such a scenario, it is impractical for more than one firm to produce the good/service. Internet Providers: A service platform might use its monopoly power over information, online interactions, and commerce to exercise undue influence over what people can see, say, or sell online.As a result, the capital cost is a strong deterrent for potential competitors.
The start-up costs associated with establishing utility plants and the distribution of their products are substantial. The utility monopolies provide water, sewer services, electricity transmission, and energy distribution such as retail natural gas transmission to cities and towns across the country. Utility Industry: This is a natural monopoly.
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