Lenoia runs a natural monopoly producing electricity for a small mountain village.The barrier preventing other firms from competing with her is:

Question

Quizplus · Accepted Answer

A natural monopoly arises when a single firm can supply the entire market at a lower cost than two or more firms. In this case, Lenoia's control over the production of electricity in the small mountain village is likely due to economies of scale, which means that as she produces more electricity, her average cost per unit decreases. This gives her a cost advantage over any potential entrants, since they would have to start at a higher cost point due to their smaller size, and it would be difficult for them to compete on price.

Lenoia Runs a Natural Monopoly Producing Electricity for a Small