In a natural monopoly, and in platform monopolies that have natural monopoly elements, the average cost:
A) decreases with additional production.
B) increases with additional production.
C) remains constant with additional production.
D) vacillates up and down with additional production.

Question

Quizplus · Accepted Answer

In a natural monopoly, the average cost decreases with additional production due to economies of scale, where the cost per unit falls as the scale of production increases.

In a Natural Monopoly, and in Platform Monopolies That Have