In Homestead town, there is an electricity company. The company provides electricity to the people in Homestead. Their services are necessary to the welfare of the entire community.
The company is the only supplier of electricity in Homestead. They can charge whatever rates of electricity to the community. To increase their profit, the electric company can charge higher rates to people in Homestead. If people can’t afford to pay their electricity bill, they will have no electricity in their home.
KEY TAKEAWAYS
A monopoly is a specific type of economic market structure. A monopoly exists when a specific person or enterprise is the only supplier of a particular goods or services.
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