上面图清楚地反映了自然垄断公司,如果像悉尼自来水公司充分练习他们的力量然后很明显,这些公司将设置一个价格等于(Pm)和生产(问米)。垄断公司甚至可以赚取利润等于绿色阴影部分如果不规范。但是，有效的经济需要政府的干预，因此，政府通过计算他们的正常收益率，特别是供水公司的价格，基于经济的收益率和风险等因素和预期的通货膨胀率。因此，根据上面的图，管制价格将等于(Pe)和生产(Q e)，其中价格等于边际成本(MC)。如果政府对垄断企业进行规制，则如图(Pe)所示，其成本低于平均总成本(ATC)，企业将蒙受损失。如果一家垄断企业不得不遭受损失，他们就会停止生产，因为从长远来看这是不可能的。政府规定的价格将等于图中所示的平均总成本(ATC)，即(P r)。最后，垄断企业本身就是价格制定者。他们在市场上没有任何竞争。垄断企业总是设定一个更高的价格，但他们的产出似乎更少或更低。垄断公司，如悉尼水务公司，以降低消费者剩余和经济效率的方式行使其垄断权力。但有政府来监管垄断活动，因为他们也有责任拥有像悉尼水务公司这样的公司。政府干预是为了维持经济效率而对垄断企业进行的调节。垄断公司在市场上很少见。像悉尼水务公司这样的自然垄断公司的存在是因为其巨大的规模经济。一个公司有可能在短期内拥有垄断权力，但由于进入壁垒的存在，很难长期维持。垄断企业甚至可以通过对产品或服务收取更高的价格，但提供更少的产出或数量来获取利润。这都是由于垄断企业的突出特点是单一的产品或服务的卖方，在市场领域没有密切的替代品。
Above figure clearly reflects that if a natural monopoly firm like Sydney water corporation fully exercises their power then it is obvious that those firm will set a price equals to (Pm) and produce (Q m). A monopoly firm can even earn profit equal to green shaded region if they are not regulated. But government intervention is required for the efficient economy so that government sets a price especially for water supplier company by calculating their normal rate of return based on the rate of return for economy and factors such as risk and expected rate of inflation. So as per above figure the regulated price will be equals to (Pe) and produce (Q e), where price is equals to marginal cost (MC). If government regulates monopoly firm then as in figure (Pe) falls below average total cost (ATC) and the firm has to suffer loss. If a monopoly firm has to suffer loss, they stop their production as it is not possible in long run. The regulated price by the government will be equals to average total cost(ATC) which is (P r) in the figure.Finally it is clear that monopoly firms are the price maker themselves. They do not face any competition in the market. Monopoly firms set a price always higher but their output seems to be less or lower. Monopoly firm as Sydney water corporation exercises their monopoly power in a way that leads to reduce consumer surplus and economic efficiency. But there is government to look after the activities of monopoly as they are also responsible for owning the firm as Sydney water corporation. Government intervention is used to regulate monopoly firm in order to maintain economic efficiency. Monopoly firms are found to be rare in the market. Natural monopoly firm as Sydney water corporation exists because of large economies of scale. It is possible for a firm to have monopoly power in short run but it is very difficult to be maintained in long run as because of barriers to entry. Monopoly firms are able to earn profit even by charging higher price for a product or services but supplying less outputs or quantity. It is all because of monopoly firm’s salient feature of being single seller of a product or services which do not have close substitutes in the market areas.