Editing Coercive monopoly (section)

==Contrasted with other monopolies==
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Exclusive control of electricity supply due to government-imposed "utility" status is a coercive monopoly because consumers have no choice but to pay the price that the monopolist demands. Consumers do not have an alternative to purchase electricity from a cheaper competitor, because the wires running into their homes belong to the monopolist.

Exclusive control of [[Coca-Cola]], by contrast, is not a coercive monopoly because consumers have other cola brands to choose from and the Coca-Cola company is subject to competitive forces. Consequently, there is an upper limit to which the company can raise its prices before profits begin to erode because of the presence of viable [[Substitute good|substitute goods]].

To maintain a ''non-coercive monopoly'', a monopolist must make pricing and production decisions knowing that, if prices are too high or quality is too low, competition may arise from another firm that can better serve the market. If the non-coercive monopoly is successful, it is called an ''efficiency monopoly'', because it has been able to keep production and supply costs lower than any other competitor so that it can charge a lower price than others and still be profitable. Since potential competitors are not able to be so efficient, they are not able to charge a lower or comparable price and still be profitable. Hence, competing against a non-coercive monopoly is possible but not profitable, whereas competing against a coercive monopoly is potentially profitable but not possible.