A natural monopoly results when costs are increasing in the scale of output or in the scope of the set of goods a firm produces.

Name: A natural monopoly results when costs are increasing in the scale of output or in the scope of the set of goods a firm produces.
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Question

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A natural monopoly occurs when there are decreasing costs in the scale of output, meaning that as a firm produces more, the average cost of producing each unit decreases, making it more efficient for a single firm to serve the entire market.

A Natural Monopoly Results When Costs Are Increasing in the Scale