What Is Monopolio naturale?
A monopolio naturale, or natural monopoly, arises in an industry where a single firm can supply the entire market demand at a lower average cost than if multiple firms were to operate112. This occurs primarily due to significant economie di scala (economies of scale) over the relevant range of market demand, meaning that as production increases, the average cost per unit falls110, 111. It is a key concept within Microeconomia, highlighting a specific type of fallo del mercato where the free market, left unregulated, naturally leads to a single dominant provider. Such industries typically involve substantial costi fissi and infrastrutture that are impractical or inefficient to duplicate, creating high barriere all'entrata for potential competitors109.
History and Origin
The concept of a natural monopoly gained prominence as economists observed certain industries, particularly utilità pubbliche like water, gas, and electricity, where competition seemed inherently inefficient due to the vast infrastructure required. John Stuart Mill, in the 19th century, was among the first to recognize industries where circumstances, rather than law, created monopolies, noting examples like gas and water companies.108 The formal definition of natural monopoly was later articulated by William Baumol in 1977, linking it to the mathematical concept of subadditivity of the cost function, which essentially means it is more costly for multiple firms to produce a given output than for a single firm.107 The recognition of these market characteristics paved the way for government regolamentazione to ensure that such monopolies served the public interest rather than exploiting their market power. For instance, in the United States, public utilities commissions were established in the early 20th century, like the Public Service Commission of Wisconsin in 1907, to regulate rates and services of these monopoly utilities.103, 104, 105, 106
Key Takeaways
- A natural monopoly arises when a single firm can produce a good or service for an entire market at a lower average cost than two or more firms.
102* High costi fissi and significant economie di scala are the primary drivers of a natural monopoly.
101* Industries often exhibiting natural monopoly characteristics include public utilities such as water, electricity, and gas distribution, and historically, telecommunications.
100* Due to the absence of direct competition, natural monopolies are typically subject to regolamentazione by governments or regulatory bodies to prevent abuse of market power and protect consumers.
99* While efficient, natural monopolies can lead to challenges like potential overpricing or lack of innovation if not properly overseen.
96, 97, 98
Interpreting the Monopolio naturale
A monopolio naturale indicates a market structure where competitive entry is unlikely to lead to efficienza produttiva or lower prices for consumers; in fact, it would likely result in wasteful duplication of infrastrutture and higher average costs across the industry.94, 95 The core interpretation is that the market's demand is only large enough to support one firm operating at its most efficient scale. Therefore, in a true natural monopoly, breaking up the single firm into multiple competitors would not enhance competition but would instead increase costs for consumers and reduce overall efficienza allocativa.93 This leads to the common justification for government intervention through regolamentazione or public ownership, rather than promoting concorrenza perfetta.
Hypothetical Example
Consider a small, isolated town that needs a single, comprehensive sewage system. The initial investment to build the network of pipes, pumping stations, and treatment facilities is enormous – a substantial costi fissi. Once this infrastrutture is in place, the costi marginali of connecting an additional household to the existing system and processing its waste are relatively low.
If two or more companies attempted to build separate, parallel sewage systems for the same town, each would incur the same massive upfront [costi fissi]. This duplication would mean that neither company could spread its fixed costs over a sufficiently large customer base to achieve the lowest possible average cost per household. Consequently, the cost for each household would be significantly higher than if a single company served the entire town. This scenario perfectly illustrates a monopolio naturale, where one provider is demonstrably more efficient than multiple competing ones.
Practical Applications
Monopoli naturali are most evident in industries requiring extensive, unduplicable infrastrutture networks to deliver services. Classic examples include local water supply, electricity grids, natural gas distribution, and, historically, landline telecommunications and railway networks. I91, 92n these sectors, the high barriere all'entrata stemming from immense [costi fissi] make competitive entry economically unfeasible.
Governments worldwide address monopoli naturali through various mechanisms, primarily regolamentazione to simulate competition and protect consumers. Regulatory bodies, such as Ofgem in the UK for energy, set prezzi amministrati or price caps, review investment plans, and establish quality standards for these utilities. T88, 89, 90his oversight aims to balance the natural cost advantages of a single provider with the need to prevent monopolistic exploitation. F87or instance, Ofgem regulates natural gas transmission networks in Great Britain, classifying them as natural monopolies to ensure consumer interests are protected through a regulatory regime designed to simulate competition. S86imilarly, antitrust laws, like the Sherman Act and Clayton Act in the U.S., generally aim to promote competition and prevent unjustified monopolies, though they recognize that some markets are natural monopolies where competition is impractical.
83, 84, 85## Limitations and Criticisms
While the concept of a monopolio naturale provides a clear economic rationale for single-firm dominance, it faces several limitations and criticisms. A significant challenge lies in the dynamic nature of markets and disintermediazione through technological change, which can erode what were once considered natural monopolies. For example, the telecommunications industry, once a clear natural monopoly due to extensive landline infrastructure, has seen increased competition with the advent of mobile and internet-based services. T80, 81, 82his shift questions whether some historically regulated sectors genuinely retain their natural monopoly characteristics.
78, 79Another criticism revolves around the effectiveness of regolamentazione. Regulators face the complex task of setting prices that allow the utility to cover costs, invest, and earn a reasonable return, without permitting excessive profits or stifling innovation. T75, 76, 77he risk of "regulatory capture," where the regulatory body comes to serve the interests of the regulated firm rather than the public, is a persistent concern. F74urthermore, some economists argue that the negative effects of natural monopoly are often exaggerated, and that the costs of regulation can outweigh its benefits. T72, 73hey suggest that potential competition, even without physical duplication of [infrastrutture], can still exert some disciplinary pressure on a monopolist.
71## Monopolio naturale vs. Monopolio
The term "monopolio naturale" is often confused with the broader term "Monopolio". While both describe a market dominated by a single seller, the key distinction lies in the reason for that dominance.
A Monopolio refers to any market structure where a single firm has significant market power and is the sole producer of a good or service, regardless of how that position was achieved. This can result from various factors, including legal protections (like patents), control over essential resources, or unfair business practices. Antitrust laws are typically designed to prevent or break up such monopolies when they arise from anti-competitive conduct.
70In contrast, a monopolio naturale specifically arises because the underlying cost structure of the industry makes it inherently more efficient for one firm to serve the entire market. I68, 69t is "natural" in the sense that it emerges from the economic fundamentals of production, primarily due to extreme economie di scala and high [costi fissi]. Unlike other monopolies, a natural monopoly is not necessarily seen as a market failure to be dismantled, but rather as a market condition that requires specific regolamentazione to prevent consumer exploitation while preserving efficiency.
FAQs
Why are water and electricity companies often considered natural monopolies?
Water and electricity companies are classic examples of natural monopolies because they require massive upfront investments in [infrastrutture] like pipe networks, power grids, and treatment plants. Duplicating these vast [infrastrutture] for multiple competing companies would be incredibly expensive and inefficient, leading to much higher costs for consumers than a single provider can achieve through [economie di scala].
#65, 66, 67## How do governments regulate natural monopolies?
Governments typically regulate natural monopolies through various forms of oversight. This often involves setting [prezzi amministrati] or price ceilings that the monopoly can charge, ensuring the quality and reliability of services, and sometimes requiring open access to infrastructure for other firms (where feasible). The goal of this [regolamentazione] is to prevent the monopoly from abusing its market power and to ensure consumers receive fair prices and good service.
#61, 62, 63, 64## Can a natural monopoly lose its "natural" status?
Yes, a natural monopoly can lose its "natural" status, primarily due to technological advancements. For example, while landline telephone services were once a strong natural monopoly due to the high cost of laying wires, the rise of mobile technology and internet-based communication has introduced significant competition, challenging the notion of a natural monopoly in that sector.
#58, 59, 60## Is it always bad to have a natural monopoly?
Not necessarily. While unregulated monopolies can lead to higher prices and reduced output, a natural monopoly, when properly regulated, can be the most efficient way to provide a service. The inherent [economie di scala] mean that a single firm can deliver the service at a lower cost than multiple firms. The challenge for policymakers is ensuring that the benefits of this efficiency are passed on to consumers, rather than captured solely by the monopolist.[^156, 57^](https://www.datainsightsmarket.com/news/article/the-system-is-a-natural-monopoly-but-has-become-a-regulatory-maze-3251), 23, [4](htt53, 54ps://potsandpansbyccg.com/2019/10/21/is-telephony-a-natural-monopoly/), 56, 7, 8, 910, 11, 1213, 14151617, 181920, 21, 22[23]46, 47, 48, 49(https://www.techzone360.com/topics/techzone/articles/2014/05/29/379961-telecommunications-natural-monopoly.htm), 24, 2526, 27, 2829[^4330^](https://www.datainsightsmarket.com/news/article/the-system-is-a-natural-monopoly-but-has-become-a-regulatory-maze-3251)[31](https://www.ofgem.gov.uk/sites/default/files/docs/2016/12/ofg930_ofgems_regulatory_stances_document_web.pdf), 32, 33[34](https://corporatefinanceinstitute.com/resources/econ[39](https://courses.lumenlearning.com/wm-microeconomics/chapter/reading-regulating-natural-monopolies/), 40, 41omics/natural-monopoly/), 353637, 38