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To: Elroy Jetson who wrote (69352)	5/21/2008 4:42:10 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 74559

That was more or less my understanding of the meaning of "natural monopoly". Which still looks like the definition of the length of a piece of string. Such definitions are excellent for politicians and lawyers to argue over and for envious people to get wound up about. As I said, a corner dairy is a natural monopoly too. It's more efficient to have one bloke in one dairy on one corner than 4 dairies on the 4 corners with a bloke in each splitting the custom 4 ways instead of 1. Mostly, people think of monopolies as getting lots of money. As I explained, all transactions are transient monopolies. Some just have more leverage than others to get increased profits. The idea that a railway is a natural monopoly is based on the idea that railways compete with railways. In fact, railways compete with trucks, roads, buses, aircraft, telephones, electricity suppliers, movies and golf. If people spend money on shipping something via truck instead of rail, it's very direct competition. But what's really going on is competition for each dollar spent. Somebody can spend a dollar on a round of golf instead of shipping some coal by rail. The competitive situation isn't immediately obvious, but it's real nevertheless. Mqurice