Analytically, monopolies differ from perfectly competitive firms in that they face a downward sloping demand. Sometimes this is referred to as possessing market power , or monopoly power . Without a source of market power, a firm must compete on cost alone. Unless you have a cost advantage, this is not a very promising avenue to follow. By analogy to an auction, we know that if bidders have identical costs then they earn no profits in the auction.
Small firms are perhaps more likely to be monopolies than large ones.
It was only the advent of cheap transportation that allowed large companies to grow and market their products all over the country. For example, small countries without free trade are more likely to have monopolies, which are likely to be much smaller than competitive firms in the United States. Following are examples of bad monopolies. New York trash haulers OPEC World wide Coffee, Cocoa, and tin cartels. Some government sanctioned monopolies like the USPS and its first class mail monopoly Good Monopolies are firms that face downward sloping demand curves for a good reason Patents.