ABSTRACT
This chapter introduces central principles of the theory of monopoly. It describes the economic structures active in utility. The chapter also describes these structures in terms of monopoly theory. The concept of economic structure is a subcategory of the concept of social structure. The economic foundations of monopoly management are fundamentally different than that of marketplace management. The chapter explains the meaning of uncertainty and the cost of information under conditions of monopoly management. The cost of searching for information is the profit that is foregone by passing up alternative investments. The level of uncertainty in the work world of a monopoly manager was a trade-off in favor of control at the expense of marginal cost. The conceptual world of the monopoly manager is simpler than that which is needed in the marketplace. In the marketplace the conditions of supply and demand, and therefore the distribution of asking prices, change over time.
