Question

What is the main difference between a legal monopoly and a natural monopoly?

Answer 1

Solution(s):

Legal monpoly - legal monopoly is much like general monopoly, there is one provider of a good or service however in a legal monopoly is supported or rights by government, It may be nationwide or in a specific area. The government has the right to monitor and regulate any activities, rates and policies of the company in exchange for the right and support by the government.

Natural monopoly- Natural monopoly exits when one conpany or firm dominating the industry. In other words natural monopoly is monopoly where If one firm is the largestest supplier of any good or services and in this industry high capital required and for entry in such industry other barriers exits.