Due to economies of scale, throughout the range of market demand, natural monopolies have:

Question

Due to economies of scale, throughout the range of market demand, natural monopolies have:​

Quizplus · Accepted Answer

Natural monopolies experience economies of scale, which means that as they produce more, their costs of production decrease. This leads to a downward-sloping long-run average cost (LRAC) curve. This is because the LRAC curve captures the lowest cost of producing a given level of output over the long run. Therefore, a natural monopoly's LRAC curve will dip as it produces more output, indicating that it is becoming more efficient over time.

Due to Economies of Scale, Throughout the Range of Market