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A natural monopoly exists when a single firm can supply a good or service to an entire market at a lower price than could two or more firms. Generally it arises when there are economies of scale over the relevant range of output.

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Related Questions

What is the difference between the term 'monopoly' and 'natural monopoly'?

The difference between the term 'monopoly' and 'natural monopoly' is a monopoly is a market situation one group controls the availability and price of a service or item. A natural monopoly is a service or item that is provided by a single sorce. An example would be transportation like buses, or taxies.


How many types of monopoly exist in the market?

There are four main types of monopoly in the market: natural monopoly, geographic monopoly, technological monopoly, and government monopoly.


Is a diamond a natural monopoly?

No.


What are the four conditions in place in a perfectly competitive market?

the economy Major of those four are the natural monopoly. geographic monopoly, govrnement monopoly. technological monopoly.


A monopoly permitted by and regulated by the government for its greater social good such as a telephone company?

natural monopoly


Is the market for duty free shopping a natural monopoly?

The market for duty-free shopping is not a natural monopoly. Duty-free shops sell products to travelers who take them out of the country. Natural monopoly only occurs if there is a high cost of starting a business in a particular industry.


How did railroads create a natural monopoly?

good job


When Which one of the following is true about a firm with a natural monopoly?

A natural monopoly is likely to arise when economies of sale exist over the relevant range of demand.


Is public education a natural monopoly?

Yes public education is a natural monopoly because it is a market that runs most efficiently when 1 large firm supplies all of its output.


Can higher education be classified as a natural monopoly in European countries and why?

Higher education cannot be classified as a natural monopoly in European countries. That is because there are private and public providers of the education service.


Where there is natural monopoly what is government most likely to implement?

Industrial regulation


How does natural monopoly function?

A single firm supplies all the output

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