RoastBeef

monopolies typically exist in capital intensive industries where the market size is small in relation to the efficient scale. if a competitor were to challenge the incumbent, the incumbent could slide down the ATC curve to produce at a lower cost and still be able to supply the entire market. the industry would then have overcapacity and it wouldnt be economically feasible for two competitors to coexist. in that case the new entrant would have risked a huge amount of capital in a loss making venture. a duopoly is different in that both competitors already produce at minimum cost while still supplying only a portion of total demand. none would produce more than they already do since they have exhausted their scale efficiencies.
would this make sense?