Natural monopolies result from:

Question

Quizplus · Accepted Answer

Natural monopolies arise when a single firm can produce the total output of the market at a lower cost than multiple smaller firms. This situation arises due to the presence of extensive economies of scale in production. As the scale of production increases, the average cost of production gradually reduces, making it difficult for smaller firms to compete on price. Control over a natural resource or patents can lead to temporary monopolies, but natural monopolies are primarily due to economies of scale.

Natural Monopolies Result From