Natural monopolies form when natural resource suppliers control portions of the utility market. This creates a monopoly that depends on the company's legal rights to its products and services.
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This allows the business to be the sole provider of this software in the market, with exclusive rights to produce and distribute its software. For example, if a software company develops accounting software that enhances the accounting process through specialized programming, it can file for a patent. Legal monopolies form when a company files a patent and gains exclusive access to a product's use. For example, if a company produces the only water purifier in the world that can desalinate and purify seawater, the company has a monopoly on that service, but still serves a vital function for society.
Monopolies have a reputation for affecting industries negatively, but the circumstances differ across different industries and markets. Since there is no competition to challenge the company, its prices may rise as demand increases. For example, if an area such as a state has only one internet company operating within state lines, the company has a monopoly on internet services in that state.
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