In a _____ monopoly, the marginal cost falls as production increases. Only one company can survive in the market as new entrants will always be at a cost disadvantage.

Question

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In a natural monopoly, the marginal cost falls as production increases due to economies of scale. This means that the incumbent firm can produce at a lower cost than any potential new entrants, giving them a cost advantage and making it difficult for new competitors to enter the market.

In a _____ Monopoly, the Marginal Cost Falls as Production