Question

One way to take advantage of economies of scale and to avoid the market power of a natural monopoly is through________

Answer 1

Regulation and government intervention can help take advantage of economies of scale and avoid the market power of a natural monopoly.

Step-by-step explanation:

A way to take advantage of economies of scale and avoid the market power of a natural monopoly is through regulation and government intervention. The government can regulate natural monopolies by setting prices, imposing quality standards, and ensuring fair competition. For example, in the case of a natural monopoly in the electric utility industry, the government can regulate the prices charged by the monopoly to prevent them from taking advantage of their market power and charging excessive prices. This helps to ensure that consumers can still benefit from the economies of scale without being exploited.