Hi can you respond to this Traditional Monopoly is a firm that is the only selle

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Hi can you respond to this

Traditional Monopoly is a firm that is the only seller of a good or service that does not have any close to substitutes. Government keeps out or keep other firms from entering in a market. The firm, one firm is the key source that produce less and charge an increased price.

Natural Monopoly is a economic of scale. This is because one firm can supply the whole market at a decreased Average Total Cost than two or more firm can. It happens when fixed cost are large to variable cost. State and local regulatory commissions set prices Natural Monopoly produce or achieve economic efficiency.

Explanation / Answer

Monopoly and Natural Monopoly Persistent monopoly pricing is generally thought to be bad because, among other things, it reduces the potential gains from trade. There are circumstances, however, under which, if only competitive pricing is permitted, suppliers will not supply a good and potential gains from trade will be lost. Under these circumstances, consumers may actually be better off permitting monopoly or having a government-regulated price that permits suppliers to make non-negative profits. This Demonstration provides a simple model showing these possibilities. Competition law, including antitrust law, intellectual property law, and other areas of law, attempts to distinguish situations of harmful monopoly from beneficial monopoly. The question for policymakers and lawmakers is under which circumstances government can do this accurately enough to do more good than harm, given the tendency for monopolies to break down or fade in the long run.

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