Cable company, electric company. Natural monopoly a monopoly that emerges from the nature of production. Monopolies created by patents, licenses, and other legal barriers are called artificial monopolies. Sometimes the source of monopoly power comes from a nonreproducible resource critical to production. DeBeers and the world s diamond trade.
Local monopolies are more common than national or international monopolies.
Long-lasting monopolies are rare because, the economic profit earned by a monopolist encourages other firms to produce close substitutes. Also, over time, technological change tends to break down barriers to entry. Because the monopoly firm supplies the entire market, the demand curve for goods or services produced by the monopolist is also the market demand curve. The demand curve is the monopolists average revenue curve. For the monopolist, MR does not equal demand or average revenue.