So yea

@Orson Krennic Monopolies can stifle free markets. It’s like a massive oak tree preventing anything from growing under it. Sometimes the government needs to cut it down and let the rest of the market grow.

Regardless if it grew on its own or if the government planted it.

Natural monopolies operate differently

It's like a local cable company

Not to mention if it falls by itself very bad things can happen like the market collapsing and prices skyrocketing because supply can’t meet demand.

That's a natural monopoly

Because the operating costs of operating another cable company are too high

@Orson Krennic Local cable companies aren’t good. It stifles competition which takes away much of the incentive to provide good deals and better technology.

Natural monoplies aren't necessarily bad

They provide services at a low cost to consumers

What’s keeping them from raising the cost?

It would be competition, but they don’t have any because the startup costs aren’t worth the profit. @Orson Krennic

The only alternative I see is regulation, local or otherwise.

@DrRisen if they did raise costs then it would be economically profitable for a new company to start up

But if they offer good service and keep their prices stable then there's no profitability

@Orson Krennic If a new company starts up its economically feasible for the already established company to temporarily lower their prices far enough that the startup, which will have a smaller customer base and ergo need a higher price line to stay in business, will be forced to sell or go bankrupt, then the monopoly can raise its prices right back up.

Consumer confidence

You're ignoring the opinions of the consumers

Sure they can do that

Monopolies are ecvil

But at that point public opinion would be negative towards the company

And what will that do, make them stop needing phones?

No, they'll be less apt to stay with the company overcharging

Or they'll find a substitute

Which consumers are very good at doing

monopolies will attempt to entrench themselves by using temporary charging reductions

They don’t have an alternative option when there’s no other companies around.

In this scenario the likely outcome would be that another cable service would expand into the area to meet the demand of the consumers

But with startup costs and a smaller initial customer base for the opposing company the monopolized company can simply discount their prices to a point at which the other company cannot keep their doors open in the area. @Orson Krennic

But then operating costs for the first company would be greater because they're not bringing in enough revenue to pay for them

@Orson Krennic Clarified. Meant to refer to the incoming company for startup and operations cost.

If they keep going through a cyclical price system, the consumers would have no incentive to stay with them, so when another company did come into the area the consumers would switch

@DrRisen that's short term

Long term, it would be a good investment for the incoming company

Especially if they're already established

@Orson Krennic Switching takes time, especially if the initial company had an exclusivity clause in place.

Time that the startup doesn’t have.

Companies change prices all the time without losing public support

It’s a stamina game, and the home field team will always have more of it.

Again, it's a long term good investment