In natural monopoly, ________ is the economic inefficiency caused by the restriction of output which raises product prices above its marginal costs.

Question

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Natural monopoly occurs when a single firm can produce an entire market's output at a lower cost than any combination of two or more smaller firms. As a result, there can be a lack of competition, and the monopolist can restrict output, driving up prices above marginal cost. This creates inefficiencies, known as deadweight loss, as there is reduced output and consumer surplus, and there may be missed opportunities for innovation and investment.

In Natural Monopoly, ________ Is the Economic Inefficiency Caused by the Restriction