If a natural monopolist is unregulated, then

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Quizplus · Accepted Answer

A natural monopolist, by definition, has high fixed costs and low marginal costs, which creates a situation where multiple firms cannot compete efficiently in the market. Without regulation, the monopolist may charge prices higher than what would be socially optimal and produce less output than is efficient. This results in an inefficient allocation of resources and deadweight loss, which is harmful to society. Therefore, unregulated natural monopolies tend to produce inefficiently from society's point of view.

If a Natural Monopolist Is Unregulated, Then