Best Describes What a Natural Monopoly Might Occur
Is needed to make a profit in the long run. Best way to address a natural monopoly without dismantling the economies of scale. Natural Monopolies A natural monopoly poses a difficult challenge for competition policy because the structure of costs and demand makes competition unlikely or costly. . Exists when many sellers experience lower average total costs than potential competitors do. A natural monopoly is a type of monopoly that occurs due to high fixed costs and a need to achieve extreme economies of scale. Rent for example is a fixed cost. A natural monopoly is a distinct type of monopoly that may arise when there are extremely high fixed costs of distribution such as exist when large-scale infrastructure is required to ensure supply. A natural monopoly occurs when the most efficient number of firms in the industry is one. Examples Train system Water companies Electricity Gas Telecom. Economies of sc...