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That’s called a natural monopoly which is a well studied phenomenon. Most commonly they are regulated as utilities with guaranteed low returns on capital and li

• roenxi 3y ago
  That isn't a natural monopoly, that is the quality of the service increasing with market share. The cost of competitors entering the market could be anything (it could easily be quite small, there are a lot of search engines, many small 1-man projects). The issue here is the quality of the product scales with market share. With a natural monopoly, if you built 2 of them in defiance of the economics of the situation they'd have similar quality of service to the single operator.
  • fovc 3y ago
    I think you’re right on a narrow definition of price and quantity like what Wikipedia gives: > A natural monopoly is a monopoly in an industry in which high infrastructural costs and other barriers to entry relative to the size of the market give the largest supplier in an industry, often the first supplier in a market, an overwhelming advantage over potential competitors. Specifically, an industry is a natural monopoly if the total cost of one firm, producing the total output, is lower than the total cost of two or more firms producing the entire production. In theory pricing/output in economics is always “quality adjusted” (which is one of the hard things in inflation series) Yes, traditionally a natural monopoly is one where if you split them, costs go up. With Google, GP is saying if you split them up quality goes down. Either way there’s “consumer harm”. (I guess very directly if the time to search goes up, the economic price of using Google goes up too)