Introduction The purpose of this paper is to find a natural monopoly in Zebulon. This paper will inform you of the product or service being sold, the barriers to enter or exit for the product, and the price controls that this natural monopoly has in the market place. This paper will also explain what would have to happen for this natural monopoly to become a perfectly competitive market for both the long term and short term outcomes.
Section One
A natural monopoly in my city is the Zebulon Country Club. According to Farrer in Stanislav’s journal in order for this to become a natural monopoly the product or service has to be essential which to the golfing community it is, it has to be non-storable which it is not storable. The final thing according to Farrer’s definition of a natural monopoly is the supplier must have a favorable production location which it would be the course where golf is played. (Skapa 2012) The unique product if the Zebulon Country Club is it is the only place you can play golf on a golf course…show more content… Similarly, an auctioneer does not know the maximum willingness to pay of the prospective bidders, and a government which is in the process of designing a system of redistributive taxation does not know the ability to pay of the individual taxpayer (Agnar, 1999 p. 165-180).
What Agnar is saying in the quote from his journal is that the seller does not know what the other party knows or wants. (Agnar, 1999 p. 165-180) Golfers are paying for pretty much what they get which is either 9 or 18 holes to play golf so I believe that the information is distributed symmetrically. Based on the prices the Zebulon Country Club has listed on their website the max that they are able to charge is $30 for 18 hours and $24 for 9 holes, because of price control.
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