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When does a natural monopoly arise?

User Dccollie
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2 Answers

2 votes

Answer:

when economies of scale occur over a relevant range of output

Step-by-step explanation:

User Vinzius
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Answer: When one firm can efficiently supply the market.

Step-by-step explanation:

A natural monopoly occurs when the biggest supplier in an industry, usually the leading business in the market, has an overpowering advantage over possible business opponents.

This is usually the case in industries with high infrastructural costs, where capital costs prevail, generating economies of scale that are too big in relation to the dimension of the market.

User Diego Veralli
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