Interpretation Of The Theory Of Natural Monopoly

As a kind of market structures, natural monopoly has been studied for a long time. In the thought of economics, ideologists researched natural monopoly on the natural characters. As the evolution of economics, new classical economics has been grown for three stages in natural monopoly, and they are economics of scales, economics of scopes and subadditivity of costs in turn. We review and analyze these thoughts and theories about natural monopoly, and then forecast the trend of natural monopoly theory based on the new institute economics.This thesis comprises four chapters except the preface and the conclusion.The first chapter reviews the thoughts about natural monopoly, which studied the kind of market structures on the natural characters of those industries from the perspectives of price decision and welfare. They had based on the natural monopoly theory.The second chapter reviews the traditional theory of natural monopoly in the frame of classical economics, from economics of scales, economics of scopes and to subadditivity of cost, including the extension of"Marshall puzzle"and"theory of contestable markets".The third chapter analyzes the traditional theory of natural monopoly based on the new classical economics, and points out the achievements and the limitations.The fourth chapter predicts the develop orientation of the natural monopoly theory with the aid of the fruit of research of the new institute economics. At the beginning of the transaction costs, we can rebuild the natural monopoly theory under the theories of"self-reinforcing mechanisms in economics"and"integration with the bind of the transaction costs". At last, we will give a brief analysis of the telecom and the electric power industry that can be characterized by the natural monopoly in the new theory frame from this thesis.