In the case of a natural monopoly, two firms can produce at lower average cost than one firm can.

Name: In the case of a natural monopoly, two firms can produce at lower average cost than one firm can.
Brand: Quizplus
Rating: 4.8 (49 reviews)

Question

Quizplus · Accepted Answer

A natural monopoly occurs when a single firm can produce output at a lower average cost than any potential competitor. Therefore, having two firms would not result in lower average costs.

In the Case of a Natural Monopoly, Two Firms Can