What term describes a monopoly that serves a specific geographic region, such as utilities?

What term describes a monopoly that serves a specific geographic region, such as utilities?

• A. Monopsony
• B. Regional monopolies
• C. Global monopolies
• D. Oligopolies

Answer: (B)

A monopoly that serves a specific geographic area is a regional monopoly. In many utilities, one company operates within a particular region because the infrastructure (pipes, meters, wires) is costly to duplicate and a single provider offers the most efficient service within that area. Government regulation often grants that company exclusive rights to serve the region to ensure reliable service and to control prices. This differs from a monopsony, which is about one buyer rather than one seller; it also isn’t a global monopoly that would cover the entire world, and it isn’t an oligopoly, where several firms share the market. The key idea is that the monopoly’s power is limited to a defined region rather than the whole market.

A monopoly that serves a specific geographic area is a regional monopoly. In many utilities, one company operates within a particular region because the infrastructure (pipes, meters, wires) is costly to duplicate and a single provider offers the most efficient service within that area. Government regulation often grants that company exclusive rights to serve the region to ensure reliable service and to control prices. This differs from a monopsony, which is about one buyer rather than one seller; it also isn’t a global monopoly that would cover the entire world, and it isn’t an oligopoly, where several firms share the market. The key idea is that the monopoly’s power is limited to a defined region rather than the whole market.