It is inefficient for more than one company to have to build a network across the region. Therefore, a natural monopoly occurs because it costs less to build and maintain one network of wires than it does to operate two networks in the same area. I think it is important to understand the factors that limit how a monopoly can influence a market. I would like first to discuss the mistaken notion of unlimited price increase. Consumers often want to disband a monopoly because monopolies have complete control over the price of their market.
Consumers believe that monopolies can raise the price of their product infinitely.
This, however, is a mistaken notion. Consider a newly created monopoly in the computer software industry. The monopoly has not been deterred because their total revenue has increased. If they continue to raise the price at an unlimited rate, they will eventually cross a point where total revenue begins to decrease. At that point, they will open a window of opportunity for another company to develop a comparable product that might seize some of the market share and disband the monopoly.