Which of the following statements about natural monopolies is true?

Question

Quizplus · Accepted Answer

Natural monopolies often exhibit economies of scale over the relevant range of output, where increasing production leads to lower average costs. This is because the fixed costs of infrastructure (like pipelines, cables, or networks) are spread over a larger number of units produced, making marginal cost below average cost, encouraging a single provider scenario for efficiency.

Which of the Following Statements About Natural Monopolies Is True