Economics teaches that the market for some goods and services are “natural” monopolies. Take telephone service, for example. A telephone service is only really valuable if any person with a phone can be connected to any other person with a phone. For this reason, the market will “naturally” coalesce around a single, monopoly provider unless the government intervenes. The Internet is another good example. I could — hypothetically — go out and create a new system for connecting computers together, and maybe even convince a few friends of mine to use it.
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MySpace Is a Natural Monopoly
Posted by: John Barrett January 17, 2007 04:00 AMEconomics teaches that the market for some goods and services are “natural” monopolies. Take telephone service, for example. A telephone service is only really valuable if any person with a phone can be connected to any other person with a phone. For this reason, the market will “naturally” coalesce around a single, monopoly provider unless the government intervenes. The Internet is another good example. I could — hypothetically — go out and create a new system for connecting computers together, and maybe even convince a few friends of mine to use it.