What is self-destructive competition? How does a natural monopoly differ from a firm that has large fixed cost

Answer 1

Don't know how to answer the second half of your ?, but can answer the first part...

In the city I grew up in, there was a price war b/w two independently- owned discount (non-name brand) gas stations that were across the street from each other. One dropped prices every wed by $0.50, and the other responded by doing so on wed and thurs. The first guy dropped his by $0.75 on tues, wed, and thurs. The second did the same. This went on for about two months... At some point, the traffic got so bad that the police had both store owners arrested for disturbing the peace.
When it was all done, both station owners were bankrupt b/c their cost had so exceeded their revenues that they couldn't sustain their businesses. The stations were bought by Exxon and Arco, respectively, and razed for more modern equipment.
True story.

Answer 2

What most economist agree are natural monopolies in the US are utility companies, where the laying down of service connections to households are not only very costly, but require the use of public property ( under streets or poles in alleys and along roads). Multiple providers would be competing for the use of public space.