61.2k views
5 votes
Is the natural gas pipelines a natural monopoly or oligopoly?

User Franny
by
7.7k points

1 Answer

3 votes
Natural gas pipelines is a NATURAL MONOPOLY. A natural monopoly occurs when an extremely high fixed costs of distribution of a particular product exist. Efficiency in this market is maintained by discouraging competition; encouraging competition will leads to loss of efficiency due to duplication of fixed factors.
User Dusky
by
7.9k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.