Disadvantages Of Natural Monopoly

723 Words3 Pages
Many say that there is no such thing as Natural Monopoly. It is simply because Monopoly itself is Monopoly no matter what. There is no categorizing Monopoly. Creating the theory of Monopoly does make some sense. Natural Monopolies often occur in markets for essential services which require a ton of budget and expensive infrastructure. It is dubbed necessary for public utilities like Power Supply, Water, Railway Service, Cable TV, gasoline and the like. People believe that Natural Monopoly originated way back in the 18th and 19th century, however, the term “Natural Monopoly” was created only recently. In order to prevent abusing their monopoly status, governments came up with the idea of regulating public utilities. How natural were the early…show more content…
I would say the best advantage it gives the consumers is having more options to choose from. When competitors compete, it only makes the consumers the beneficiary. What are its disadvantages? It leads to excessive competition which only leads to financial losses. Some competitors even end up merging just to make up for their significant losses. Only a few dominate and end up with profit. Worst is, some companies become bankrupt and end up selling their rights to operate. To prevent this, the government came up with efforts to avoid wasteful…show more content…
I simply find it so ridiculous to have a number of electric light companies to choose from. Image, choosing between Davao Light Power Company, Davao Voltage Company, Davao Megavolt Electric Company, etc.? It simply is very ridiculous. There can only be one as they say. The same goes for railway and water services. Of course, it does not apply to every public utility. Like for example, it is nice to have multiple options for Cable Service. It gives us more flexibility to find which service best fits our needs. There can’t be only one cable service. The same goes with Telephone and Internet

More about Disadvantages Of Natural Monopoly

Open Document