coltorl, rok temu

A natural monopoly is when an industry is difficult to break into, making competition difficult or impossible. This favors incumbents, in fact, a lot of industries are natural monopolies (pharma, aerospace, chip production).

The difficulty of breaking into an industry may be because:

• new players cannot compete with established scale
• start up costs require a nearly all-or-nothing approach, high risk
• regulations tie the hand of new innovators