- This occurs when the economies of scale are so high that it only make economic sense to have one company.
- Increase in scale results into decrease in average cost.
- In addition, this also mean that this is only a single seller, where it produces 100% of the market output.
- Examples: Public utilies that provides gas, water, electricity, etc...
Traites to look for:
- a single seller
- produces branded to entry
- creates barriers to entry
- maximises profits